You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
Is Unisys Corporation (NYSE:UIS) the right pick for your portfolio? The smart money is surely buying. The number of long hedge fund investments improved by 2 recently. There were 18 hedge funds in our database with UIS positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Kimball International Inc (NASDAQ:KBAL), LivePerson, Inc. (NASDAQ:LPSN), and Sunedison Semiconductor Ltd (NASDAQ:SEMI) to gather more data points.
Follow Unisys Corp (NYSE:UIS)
Follow Unisys Corp (NYSE:UIS)
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
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With all of this in mind, we’re going to analyze the recent action surrounding Unisys Corporation (NYSE:UIS).
How are hedge funds trading Unisys Corporation (NYSE:UIS)?
Heading into the fourth quarter of 2016, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from the second quarter of 2016. On the other hand, there were a total of 17 hedge funds with a bullish position in UIS at the beginning of this year. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Chuck Royce’s Royce & Associates has the most valuable position in Unisys Corporation (NYSE:UIS), worth close to $23.7 million, amounting to 0.2% of its total 13F portfolio. The second most bullish fund manager is Citadel Investment Group, led by Ken Griffin, which holds a $9.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining professional money managers that hold long positions encompass Jim Simons’s Renaissance Technologies, D. E. Shaw’s D E Shaw and Israel Englander’s Millennium 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.
As industrywide interest jumped, specific money managers were breaking ground themselves. Laurion Capital Management, led by Benjamin A. Smith, created the largest call position in Unisys Corporation (NYSE:UIS). Laurion Capital Management had $3.2 million invested in the company at the end of the quarter. Neil Chriss’s Hutchin Hill Capital also initiated a $1.4 million position during the quarter. The other funds with new positions in the stock are Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Ken Griffin’s Citadel Investment Group, and John Overdeck and David Siegel’s Two Sigma Advisors.
Let’s now review 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 Kimball International Inc (NASDAQ:KBAL), LivePerson, Inc. (NASDAQ:LPSN), Sunedison Semiconductor Ltd (NASDAQ:SEMI), and MYR Group Inc (NASDAQ:MYRG). This group of stocks’ market valuations match UIS’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KBAL | 9 | 45248 | 0 |
| LPSN | 14 | 69467 | -4 |
| SEMI | 22 | 150971 | 10 |
| MYRG | 16 | 47746 | 3 |
As you can see these stocks had an average of 15.25 hedge funds with bullish positions and the average amount invested in these stocks was $78 million. That figure was $71 million in UIS’s case. Sunedison Semiconductor Ltd (NASDAQ:SEMI) is the most popular stock in this table. On the other hand Kimball International Inc (NASDAQ:KBAL) is the least popular one with only 9 bullish hedge fund positions. Unisys Corporation (NYSE:UIS) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SEMI might be a better candidate to consider taking a long position in.
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Disclosure: None
