In this article you are going to find out whether hedge funds think Universal Health Services, Inc. (NYSE:UHS) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Universal Health Services, Inc. (NYSE:UHS) investors should pay attention to an increase in enthusiasm from smart money in recent months. Universal Health Services, Inc. (NYSE:UHS) was in 43 hedge funds’ portfolios at the end of March. The all time high for this statistic is 44. There were 39 hedge funds in our database with UHS positions at the end of the fourth quarter. Our calculations also showed that UHS isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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Larry Robbins of Glenview Capital
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Do Hedge Funds Think UHS Is A Good Stock To Buy Now?
At first quarter’s end, a total of 43 of the hedge funds tracked by Insider Monkey were long this stock, a change of 10% from one quarter earlier. By comparison, 30 hedge funds held shares or bullish call options in UHS a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
More specifically, Camber Capital Management was the largest shareholder of Universal Health Services, Inc. (NYSE:UHS), with a stake worth $186.7 million reported as of the end of March. Trailing Camber Capital Management was Glenview Capital, which amassed a stake valued at $154.6 million. Marshall Wace LLP, Arrowstreet Capital, and Partner Fund 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 Solel Partners allocated the biggest weight to Universal Health Services, Inc. (NYSE:UHS), around 11.26% of its 13F portfolio. Camber Capital Management is also relatively very bullish on the stock, designating 6.41 percent of its 13F equity portfolio to UHS.
Now, specific money managers have jumped into Universal Health Services, Inc. (NYSE:UHS) headfirst. Clough Capital Partners, managed by Charles Clough, assembled the biggest position in Universal Health Services, Inc. (NYSE:UHS). Clough Capital Partners had $22.9 million invested in the company at the end of the quarter. Renaissance Technologies also initiated a $12.1 million position during the quarter. The other funds with brand new UHS positions are Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Jinghua Yan’s TwinBeech Capital, and Alec Litowitz and Ross Laser’s Magnetar Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Universal Health Services, Inc. (NYSE:UHS) but similarly valued. We will take a look at Lamb Weston Holdings, Inc. (NYSE:LW), IPG Photonics Corporation (NASDAQ:IPGP), Bausch Health Companies (NYSE:BHC), Qiagen NV (NASDAQ:QGEN), Globe Life Inc. (NYSE:GL), Bunge Limited (NYSE:BG), and The Gap Inc. (NYSE:GPS). This group of stocks’ market valuations are closest to UHS’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LW | 38 | 493079 | 9 |
| IPGP | 31 | 416236 | 6 |
| BHC | 42 | 4076779 | -1 |
| QGEN | 27 | 562548 | 3 |
| GL | 33 | 844018 | 2 |
| BG | 44 | 653455 | -7 |
| GPS | 42 | 988959 | 4 |
| Average | 36.7 | 1147868 | 2.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 36.7 hedge funds with bullish positions and the average amount invested in these stocks was $1148 million. That figure was $883 million in UHS’s case. Bunge Limited (NYSE:BG) is the most popular stock in this table. On the other hand Qiagen NV (NASDAQ:QGEN) is the least popular one with only 27 bullish hedge fund positions. Universal Health Services, Inc. (NYSE:UHS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for UHS is 85.4. 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 17.4% in 2021 through June 18th and still beat the market by 6.1 percentage points. Hedge funds were also right about betting on UHS, though not to the same extent, as the stock returned 10.1% since Q1 (through June 18th) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.
