Does Unum Group (NYSE:UNM) represent a good buying opportunity at the moment? Let’s briefly check the hedge fund sentiment towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail unconceivably on some occasions, but their stock picks have been generating superior risk-adjusted returns on average over the years.
Is Unum Group (NYSE:UNM) worth your attention right now? Prominent investors are getting less bullish. The number of bullish hedge fund positions fell by 6 lately. UNMwas in 16 hedge funds’ portfolios at the end of the third quarter of 2016. There were 22 hedge funds in our database with UNM positions at the end of the previous quarter. At the end of this article we will also compare UNM to other stocks including YPF SA (ADR) (NYSE:YPF), Lear Corporation (NYSE:LEA), and Teck Resources Ltd (USA) (NYSE:TCK) to get a better sense of its popularity.
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With all of this in mind, we’re going to take a look at the new action encompassing Unum Group (NYSE:UNM).
What have hedge funds been doing with Unum Group (NYSE:UNM)?
Heading into the fourth quarter of 2016, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -27% from the second quarter of 2016. On the other hand, there were a total of 23 hedge funds with a bullish position in UNM at the beginning of this year. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Cliff Asness’s AQR Capital Management has the number one position in Unum Group (NYSE:UNM), worth close to $110.9 million, corresponding to 0.2% of its total 13F portfolio. Coming in second is Winton Capital Management, led by David Harding, which holds a $21.3 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Other members of the smart money with similar optimism contain Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Phill Gross and Robert Atchinson’s Adage Capital Management and Ken Fisher’s Fisher Asset Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
We already know that not all hedge funds are bullish on the stock and some hedge funds actually cut their positions entirely. It’s worth mentioning that Paul Marshall and Ian Wace’s Marshall Wace LLP cut the biggest position of all the hedgies followed by Insider Monkey, comprising about $2.9 million in stock. First Eagle Investment Management also dropped its position, about $1.9 million worth.
Let’s go over hedge fund activity in other stocks similar to Unum Group (NYSE:UNM). These stocks are YPF SA (ADR) (NYSE:YPF), Lear Corporation (NYSE:LEA), Teck Resources Ltd (USA) (NYSE:TCK), and Torchmark Corporation (NYSE:TMK). All of these stocks’ market caps resemble UNM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| YPF | 19 | 360036 | -7 |
| LEA | 32 | 708590 | -3 |
| TCK | 33 | 834251 | 6 |
| TMK | 19 | 614374 | -1 |
As you can see these stocks had an average of 25.75 hedge funds with bullish positions and the average amount invested in these stocks was $629 million. That figure was $187 million in UNM’s case. Teck Resources Ltd (USA) (NYSE:TCK) is the most popular stock in this table. On the other hand YPF SA (ADR) (NYSE:YPF) is the least popular one with only 19 bullish hedge fund positions. Compared to these stocks Unum Group (NYSE:UNM) is even less popular than YPF. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
