We are still in an overall bull market and many stocks that smart money investors were piling into surged in 2019. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained more than 57% each. Hedge funds’ top 3 stock picks returned 45.7% last year and beat the S&P 500 ETFs by 14.5 percentage points. That’s a big deal. This is why following the smart money sentiment is a useful tool at identifying the next stock to invest in.
Is Unisys Corporation (NYSE:UIS) worth your attention right now? The best stock pickers are becoming hopeful. The number of long hedge fund bets advanced by 8 in recent months. Our calculations also showed that UIS isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video at the end of this article for Q2 rankings).
In the 21st century investor’s toolkit there are many tools investors employ to size up stocks. A pair of the less known tools are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the best fund managers can beat the S&P 500 by a healthy amount (see the details here).
Sander Gerber of Hudson Bay Capital
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock is still extremely cheap despite already gaining 20 percent. Now we’re going to review the latest hedge fund action surrounding Unisys Corporation (NYSE:UIS).
What does smart money think about Unisys Corporation (NYSE:UIS)?
At Q3’s end, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards UIS over the last 17 quarters. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Peter Schliemann’s Rutabaga Capital Management has the most valuable position in Unisys Corporation (NYSE:UIS), worth close to $7.1 million, corresponding to 2.5% of its total 13F portfolio. The second largest stake is held by Royce & Associates, managed by Chuck Royce, which holds a $6.3 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions include David E. Shaw’s D E Shaw, Cliff Asness’s AQR Capital Management and George McCabe’s Portolan Capital Management. In terms of the portfolio weights assigned to each position Rutabaga Capital Management allocated the biggest weight to Unisys Corporation (NYSE:UIS), around 2.51% of its 13F portfolio. Harvey Partners is also relatively very bullish on the stock, designating 1.2 percent of its 13F equity portfolio to UIS.
Consequently, specific money managers were leading the bulls’ herd. Hudson Bay Capital Management, managed by Sander Gerber, established the largest position in Unisys Corporation (NYSE:UIS). Hudson Bay Capital Management had $1.7 million invested in the company at the end of the quarter. Jeffrey Moskowitz’s Harvey Partners also made a $1.7 million investment in the stock during the quarter. The other funds with brand new UIS positions are Paul Tudor Jones’s Tudor Investment Corp, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Minhua Zhang’s Weld Capital Management.
Let’s check out hedge fund activity in other stocks similar to Unisys Corporation (NYSE:UIS). These stocks are Collegium Pharmaceutical Inc (NASDAQ:COLL), Genco Shipping & Trading Limited (NYSE:GNK), Digi International Inc. (NASDAQ:DGII), and Inseego Corp. (NASDAQ:INSG). 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 |
|---|---|---|---|
| COLL | 13 | 63291 | -3 |
| GNK | 11 | 210512 | -1 |
| DGII | 12 | 49465 | -1 |
| INSG | 8 | 16483 | 0 |
| Average | 11 | 84938 | -1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $85 million. That figure was $43 million in UIS’s case. Collegium Pharmaceutical Inc (NASDAQ:COLL) is the most popular stock in this table. On the other hand Inseego Corp. (NASDAQ:INSG) is the least popular one with only 8 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 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 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 2% in 2019 and trailed 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 65 percent of these stocks outperformed the market in 2019.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
