Hedge Funds Have Never Been More Bullish On Uber Technologies, Inc. (UBER)

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Uber Technologies, Inc. (NYSE:UBER), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Uber Technologies, Inc. (NYSE:UBER) investors should be aware of an increase in enthusiasm from smart money recently. Uber Technologies, Inc. (NYSE:UBER) was in 135 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is  135. There were 130 hedge funds in our database with UBER holdings at the end of March. Our calculations also showed that UBER ranked 11th among the 30 most popular stocks among hedge funds (click for Q2 rankings).

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Brad Gerstner of Altimeter Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to view the latest hedge fund action encompassing Uber Technologies, Inc. (NYSE:UBER).

Do Hedge Funds Think UBER Is A Good Stock To Buy Now?

Heading into the third quarter of 2021, a total of 135 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 4% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in UBER over the last 24 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Altimeter Capital Management held the most valuable stake in Uber Technologies, Inc. (NYSE:UBER), which was worth $1227.9 million at the end of the second quarter. On the second spot was Tiger Global Management LLC which amassed $1039.9 million worth of shares. Coatue Management, Point72 Asset Management, and D E Shaw were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Marathon Partners allocated the biggest weight to Uber Technologies, Inc. (NYSE:UBER), around 16.92% of its 13F portfolio. Tao Capital is also relatively very bullish on the stock, setting aside 14.78 percent of its 13F equity portfolio to UBER.

Now, key hedge funds have jumped into Uber Technologies, Inc. (NYSE:UBER) headfirst. SRS Investment Management, managed by Karthik Sarma, created the most outsized position in Uber Technologies, Inc. (NYSE:UBER). SRS Investment Management had $172.4 million invested in the company at the end of the quarter. David Tepper’s Appaloosa Management LP also initiated a $102 million position during the quarter. The other funds with new positions in the stock are Scott Ferguson’s Sachem Head Capital, Richard Merage’s MIG Capital, and Jeff Lignelli’s Incline Global Management.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Uber Technologies, Inc. (NYSE:UBER) but similarly valued. We will take a look at Anthem Inc (NYSE:ANTM), Lam Research Corporation (NASDAQ:LRCX), Airbnb, Inc. (NASDAQ:ABNB), British American Tobacco plc (NYSE:BTI), Infosys Limited (NYSE:INFY), Booking Holdings Inc. (NASDAQ:BKNG), and PetroChina Company Limited (NYSE:PTR). This group of stocks’ market caps are similar to UBER’s market cap.

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As you can see these stocks had an average of 46.4 hedge funds with bullish positions and the average amount invested in these stocks was $3067 million. That figure was $10413 million in UBER’s case. Booking Holdings Inc. (NASDAQ:BKNG) is the most popular stock in this table. On the other hand PetroChina Company Limited (NYSE:PTR) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Uber Technologies, Inc. (NYSE:UBER) is more popular among hedge funds. Our overall hedge fund sentiment score for UBER is 95. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24.1% in 2021 through September 20th and still beat the market by 6.9 percentage points. Unfortunately UBER wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on UBER were disappointed as the stock returned -20.6% since the end of the second quarter (through 9/20) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.