The latest 13F reporting period has come and gone, and 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, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought Unum Group (NYSE:UNM) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.
Unum Group (NYSE:UNM) was in 30 hedge funds’ portfolios at the end of September. The all time high for this statistic is 33. UNM has experienced an increase in enthusiasm from smart money recently. There were 23 hedge funds in our database with UNM holdings at the end of June. Our calculations also showed that UNM isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
David E. Shaw of D.E. Shaw
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 we’re going to take a look at the key hedge fund action encompassing Unum Group (NYSE:UNM).
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 the previous quarter. Below, you can check out the change in hedge fund sentiment towards UNM over the last 25 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Arrowstreet Capital held the most valuable stake in Unum Group (NYSE:UNM), which was worth $115.1 million at the end of the third quarter. On the second spot was Two Sigma Advisors which amassed $39.7 million worth of shares. 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, dishing out 0.74 percent of its 13F equity portfolio to UNM.
As one would reasonably expect, some big names have been driving this bullishness. Tudor Investment Corp, managed by Paul Tudor Jones, initiated the most outsized 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 made a $12.6 million investment in the stock during the quarter. The other funds with brand new UNM positions are 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 now review hedge fund activity in other stocks – not necessarily in the same industry as Unum Group (NYSE:UNM) but similarly valued. We will take a look at 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). This group of stocks’ market caps match 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 29.6% in 2021 and still managed to beat the market by another 3.6 percentage points. Hedge funds were somewhat right about betting on UNM as the stock returned 3.6% since the end of September (through January 31st) and outperformed the top 5 hedge fund stocks but not the market. This is a rare phenomenon as top hedge fund stocks usually beat the market over the long-term.
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Disclosure: None. This article was originally published at Insider Monkey.
