Is Unisys Corporation (NYSE:UIS) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is Unisys Corporation (NYSE:UIS) a healthy stock for your portfolio? Prominent investors are buying. The number of bullish hedge fund positions increased by 2 lately. Our calculations also showed that uis isn’t among the 30 most popular stocks among hedge funds. UIS was in 19 hedge funds’ portfolios at the end of March. There were 17 hedge funds in our database with UIS holdings at the end of the previous quarter.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to take a peek at the new hedge fund action surrounding Unisys Corporation (NYSE:UIS).
How have hedgies been trading Unisys Corporation (NYSE:UIS)?
At Q1’s end, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 12% from one quarter earlier. On the other hand, there were a total of 14 hedge funds with a bullish position in UIS a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Unisys Corporation (NYSE:UIS) was held by Royce & Associates, which reported holding $16.6 million worth of stock at the end of March. It was followed by Millennium Management with a $10.4 million position. Other investors bullish on the company included AQR Capital Management, D E Shaw, and Portolan Capital Management.
As industrywide interest jumped, key money managers have been driving this bullishness. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the most valuable position in Unisys Corporation (NYSE:UIS). Arrowstreet Capital had $3.6 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also initiated a $0.6 million position during the quarter. The following funds were also among the new UIS investors: Paul Tudor Jones’s Tudor Investment Corp, David Costen Haley’s HBK Investments, and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Unisys Corporation (NYSE:UIS) but similarly valued. We will take a look at CEVA, Inc. (NASDAQ:CEVA), Retail Value Inc. (NYSE:RVI), Aurinia Pharmaceuticals Inc (NASDAQ:AUPH), and 500.com Limited (NYSE:WBAI). This group of stocks’ market caps are similar to UIS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CEVA | 10 | 30237 | 0 |
| RVI | 17 | 168765 | 4 |
| AUPH | 13 | 88651 | 5 |
| WBAI | 2 | 426 | 1 |
| Average | 10.5 | 72020 | 2.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $72 million. That figure was $78 million in UIS’s case. Retail Value Inc. (NYSE:RVI) is the most popular stock in this table. On the other hand 500.com Limited (NYSE:WBAI) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Unisys Corporation (NYSE:UIS) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately UIS wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on UIS were disappointed as the stock returned -15.7% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
