The government requires hedge funds and wealthy investors with over a certain portfolio size to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on September 30. We at Insider Monkey have made an extensive database of more than 700 of those elite funds and prominent investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Domtar Corporation (NYSE:UFS) based on those filings.
Is Domtar Corporation (NYSE:UFS) a bargain? The best stock pickers are getting less optimistic. The number of bullish hedge fund positions fell by 3 lately. Our calculations also showed that UFS isn’t among the 30 most popular stocks among hedge funds. UFS was in 22 hedge funds’ portfolios at the end of the third quarter of 2018. There were 25 hedge funds in our database with UFS positions at the end of the previous quarter.
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Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as MGM Resorts International (NYSE:MGM) but similarly valued. These stocks are Waters Corporation (NYSE:WAT), CBRE Group, Inc. (NYSE:CBRE), Evergy, Inc. (NYSE:EVRG), and Restaurant Brands International Inc (NYSE:QSR). This group of stocks’ market valuations match MGM’s market valuation.
The largest stake in Domtar Corporation (NYSE:UFS) was held by Millennium Management, which reported holding $91.2 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $38.3 million position. Other investors bullish on the company included GLG Partners, Balyasny Asset Management, and Gotham Asset Management.
Seeing as Domtar Corporation (NYSE:UFS) has faced a decline in interest from the entirety of the hedge funds we track, we can see that there were a few fund managers who sold off their positions entirely by the end of the third quarter. Intriguingly, Jim Simons’s Renaissance Technologies dropped the largest position of the “upper crust” of funds tracked by Insider Monkey, worth close to $10.7 million in stock, and Michael Platt and William Reeves’s BlueCrest Capital Mgmt. was right behind this move, as the fund dropped about $2.6 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 3 funds by the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Domtar Corporation (NYSE:UFS). We will take a look at Vonage Holdings Corp. (NYSE:VG), The Boston Beer Company Inc (NYSE:SAM), Kinross Gold Corporation (NYSE:KGC), and MorphoSys AG (NASDAQ:MOR). This group of stocks’ market values are similar to UFS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VG | 26 | 195159 | 7 |
| SAM | 14 | 264305 | 0 |
| KGC | 18 | 267341 | -3 |
| MOR | 5 | 56300 | -2 |
| Average | 15.75 | 195776 | 0.5 |
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As you can see these stocks had an average of 15.75 hedge funds with bullish positions and the average amount invested in these stocks was $196 million. That figure was $232 million in UFS’s case. Vonage Holdings Corp. (NYSE:VG) is the most popular stock in this table. On the other hand MorphoSys AG (NASDAQ:MOR) is the least popular one with only 5 bullish hedge fund positions. Domtar Corporation (NYSE:UFS) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard VG might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
