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 December. At Insider Monkey, we follow nearly 750 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 Manchester United PLC (NYSE:MANU), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Manchester United PLC (NYSE:MANU) has seen an increase in support from the world’s most elite money managers recently. Our calculations also showed that manu isn’t among the 30 most popular stocks among hedge funds.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
Let’s take a peek at the recent hedge fund action regarding Manchester United PLC (NYSE:MANU).
Hedge fund activity in Manchester United PLC (NYSE:MANU)
At Q4’s end, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from the second quarter of 2018. On the other hand, there were a total of 8 hedge funds with a bullish position in MANU a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
Among these funds, Lansdowne Partners held the most valuable stake in Manchester United PLC (NYSE:MANU), which was worth $42.3 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $9.5 million worth of shares. Moreover, D E Shaw, Alyeska Investment Group, and Citadel Investment Group were also bullish on Manchester United PLC (NYSE:MANU), allocating a large percentage of their portfolios to this stock.
With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Alyeska Investment Group, managed by Anand Parekh, initiated the biggest position in Manchester United PLC (NYSE:MANU). Alyeska Investment Group had $1.9 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $1 million position during the quarter. The only other fund with a new position in the stock is Matthew Hulsizer’s PEAK6 Capital Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Manchester United PLC (NYSE:MANU) but similarly valued. We will take a look at Azul S.A. (NYSE:AZUL), NovoCure Limited (NASDAQ:NVCR), Cantel Medical Corp. (NYSE:CMD), and AMC Networks Inc (NASDAQ:AMCX). This group of stocks’ market valuations match MANU’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AZUL | 11 | 145148 | 0 |
| NVCR | 17 | 218712 | -3 |
| CMD | 13 | 182274 | -10 |
| AMCX | 19 | 172648 | -2 |
| Average | 15 | 179696 | -3.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $180 million. That figure was $62 million in MANU’s case. AMC Networks Inc (NASDAQ:AMCX) is the most popular stock in this table. On the other hand Azul S.A. (NYSE:AZUL) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Manchester United PLC (NYSE:MANU) is even less popular than AZUL. Hedge funds dodged a bullet by taking a bearish stance towards MANU. Our calculations showed that the top 15 most popular hedge fund stocks returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately MANU wasn’t nearly as popular as these 15 stock (hedge fund sentiment was very bearish); MANU investors were disappointed as the stock returned 3.8% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
