Here is What Hedge Funds Think About UBS AG (USA) (UBS)

There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other elite funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze UBS AG (USA) (NYSE:UBS).

UBS AG (USA) (NYSE:UBS) was in 13 hedge funds’ portfolios at the end of September. UBS has seen a decrease in hedge fund sentiment recently. There were 14 hedge funds in our database with UBS positions at the end of the previous quarter. At the end of this article we will also compare UBS to other stocks including Biogen Idec Inc. (NASDAQ:BIIB), Mondelez International Inc (NASDAQ:MDLZ), and NTT Docomo Inc (ADR) (NYSE:DCM) to get a better sense of its popularity.

Now, we’re going to go over the fresh action encompassing UBS AG (USA) (NYSE:UBS).

What does the smart money think about UBS AG (USA) (NYSE:UBS)?

At the end of the third quarter, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -7% from the second quarter. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Fisher Asset Management, managed by Ken Fisher, holds the largest position in UBS AG (USA) (NYSE:UBS). Fisher Asset Management has a $512.1 million position in the stock, comprising 1.1% of its 13F portfolio. The second most bullish fund manager is Pzena Investment Management, managed by Richard S. Pzena, which holds a $234 million position; the fund has 1.5% of its 13F portfolio invested in the stock. Other professional money managers that are bullish encompass Jim Simons’s Renaissance Technologies, Brian Ashford-Russell and Tim Woolley’s Polar Capital and Cliff Asness’s AQR Capital Management.

Judging by the fact that UBS AG (USA) (NYSE:UBS) has experienced falling interest from the entirety of the hedge funds we track, we can see that there exists a select few funds who were dropping their positions entirely heading into Q4. Interestingly, David Dreman’s Dreman Value Management said goodbye to the largest stake of all the hedgies watched by Insider Monkey, valued at about $3.6 million in stock, and Israel Englander’s Millennium Management was right behind this move, as the fund said goodbye to about $2 million worth.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as UBS AG (USA) (NYSE:UBS) but similarly valued. We will take a look at Biogen Idec Inc. (NASDAQ:BIIB), Mondelez International Inc (NASDAQ:MDLZ), NTT Docomo Inc (ADR) (NYSE:DCM), and Westpac Banking Corporation (ADR) (NYSE:WBK). This group of stocks’ market values resemble UBS’s market value.

As you can see these stocks had an average of 35.5 hedge funds with bullish positions and the average amount invested in these stocks was $2,539 million. That figure was $793 million in UBS’s case. Mondelez International Inc (NASDAQ:MDLZ) is the most popular stock in this table. On the other hand Westpac Banking Corporation (ADR) (NYSE:WBK) is the least popular one with only 6 bullish hedge fund positions. UBS AG (USA) (NYSE:UBS) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard MDLZ might be a better candidate to consider a long position.