Is Unum Group (NYSE:UNM) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Unum Group (NYSE:UNM) was in 30 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 33. UNM shareholders have witnessed an increase in enthusiasm from smart money of late. There were 23 hedge funds in our database with UNM positions at the end of the second quarter. Our calculations also showed that UNM isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind let’s take a glance at the latest hedge fund action regarding Unum Group (NYSE:UNM).
John Overdeck of Two Sigma Advisors
Do Hedge Funds Think UNM Is A Good Stock To Buy Now?
At third quarter’s end, a total of 30 of the hedge funds tracked by Insider Monkey were long this stock, a change of 30% from one quarter earlier. By comparison, 22 hedge funds held shares or bullish call options in UNM a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Arrowstreet Capital was the largest shareholder of Unum Group (NYSE:UNM), with a stake worth $115.1 million reported as of the end of September. Trailing Arrowstreet Capital was Two Sigma Advisors, which amassed a stake valued at $39.7 million. AQR Capital Management, Citadel Investment Group, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Prana Capital Management allocated the biggest weight to Unum Group (NYSE:UNM), around 1.19% of its 13F portfolio. P.A.W. CAPITAL PARTNERS is also relatively very bullish on the stock, earmarking 0.74 percent of its 13F equity portfolio to UNM.
With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Tudor Investment Corp, managed by Paul Tudor Jones, assembled the biggest position in Unum Group (NYSE:UNM). Tudor Investment Corp had $15.2 million invested in the company at the end of the quarter. Renaissance Technologies also initiated a $12.6 million position during the quarter. The following funds were also among the new UNM investors: D. E. Shaw’s D E Shaw, Michael Gelband’s ExodusPoint Capital, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners.
Let’s go over hedge fund activity in other stocks similar to Unum Group (NYSE:UNM). These stocks are MAXIMUS, Inc. (NYSE:MMS), NCR Corporation (NYSE:NCR), American National Group Inc. (NASDAQ:ANAT), Tuya Inc. (NYSE:TUYA), MGIC Investment Corporation (NYSE:MTG), Certara, Inc. (NASDAQ:CERT), and Rayonier Inc. (NYSE:RYN). All of these stocks’ market caps are similar to UNM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MMS | 14 | 89836 | -12 |
| NCR | 28 | 517584 | -10 |
| ANAT | 16 | 93762 | -4 |
| TUYA | 11 | 71032 | 3 |
| MTG | 27 | 298208 | 0 |
| CERT | 15 | 170457 | 8 |
| RYN | 13 | 329246 | 0 |
| Average | 17.7 | 224304 | -2.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.7 hedge funds with bullish positions and the average amount invested in these stocks was $224 million. That figure was $350 million in UNM’s case. NCR Corporation (NYSE:NCR) is the most popular stock in this table. On the other hand Tuya Inc. (NYSE:TUYA) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Unum Group (NYSE:UNM) is more popular among hedge funds. Our overall hedge fund sentiment score for UNM is 87.3. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately UNM wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on UNM were disappointed as the stock returned -6.8% since the end of the third quarter (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
