The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded UnitedHealth Group Inc. (NYSE:UNH) and determine whether the smart money was really smart about this stock.
UnitedHealth Group Inc. (NYSE:UNH) investors should be aware of a decrease in enthusiasm from smart money of late. UnitedHealth Group Inc. (NYSE:UNH) was in 95 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 105. Our calculations also showed that UNH ranked #22 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. With all of this in mind let’s go over the new hedge fund action regarding UnitedHealth Group Inc. (NYSE:UNH).
John Armitage of Egerton Capital
Do Hedge Funds Think UNH Is A Good Stock To Buy Now?
At third quarter’s end, a total of 95 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -10% from the second quarter of 2021. On the other hand, there were a total of 89 hedge funds with a bullish position in UNH a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in UnitedHealth Group Inc. (NYSE:UNH) was held by GQG Partners, which reported holding $1417 million worth of stock at the end of September. It was followed by Eagle Capital Management with a $1205.4 million position. Other investors bullish on the company included Lone Pine Capital, Fisher Asset Management, and Egerton Capital Limited. In terms of the portfolio weights assigned to each position Route One Investment Company allocated the biggest weight to UnitedHealth Group Inc. (NYSE:UNH), around 8.38% of its 13F portfolio. GuardCap Asset Management is also relatively very bullish on the stock, earmarking 7.72 percent of its 13F equity portfolio to UNH.
Seeing as UnitedHealth Group Inc. (NYSE:UNH) has faced falling interest from the aggregate hedge fund industry, logic holds that there is a sect of money managers that decided to sell off their positions entirely last quarter. At the top of the heap, Jimmy Levin’s Sculptor Capital sold off the biggest position of the 750 funds followed by Insider Monkey, comprising about $263.4 million in stock. Renaissance Technologies, also said goodbye to its stock, about $157.9 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 10 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as UnitedHealth Group Inc. (NYSE:UNH) but similarly valued. We will take a look at Bank of America Corporation (NYSE:BAC), The Home Depot, Inc. (NYSE:HD), Mastercard Incorporated (NYSE:MA), The Procter & Gamble Company (NYSE:PG), ASML Holding N.V. (NASDAQ:ASML), The Walt Disney Company (NYSE:DIS), and Paypal Holdings Inc (NASDAQ:PYPL). This group of stocks’ market values match UNH’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BAC | 72 | 46487618 | -15 |
| HD | 58 | 4380170 | -6 |
| MA | 146 | 17659997 | -10 |
| PG | 69 | 6414152 | 1 |
| ASML | 41 | 4858031 | -3 |
| DIS | 101 | 9416047 | -11 |
| PYPL | 123 | 12880990 | -20 |
| Average | 87.1 | 14585286 | -9.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 87.1 hedge funds with bullish positions and the average amount invested in these stocks was $14585 million. That figure was $11705 million in UNH’s case. Mastercard Incorporated (NYSE:MA) is the most popular stock in this table. On the other hand ASML Holding N.V. (NASDAQ:ASML) is the least popular one with only 41 bullish hedge fund positions. UnitedHealth Group Inc. (NYSE:UNH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for UNH is 47.9. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on UNH as the stock returned 21.3% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
