Where Do Hedge Funds Stand On Union Pacific Corporation (UNP)?

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Union Pacific Corporation (NYSE:UNP).

Is Union Pacific Corporation (NYSE:UNP) a great investment right now? Prominent investors were taking a bullish view. The number of bullish hedge fund positions inched up by 7 recently. Union Pacific Corporation (NYSE:UNP) was in 75 hedge funds’ portfolios at the end of March. The all time high for this statistic was previously 74. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that UNP isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

In the 21st century investor’s toolkit there are a lot of indicators shareholders employ to value stocks. Some of the most innovative indicators are hedge fund and insider trading interest. We have shown that, historically, those who follow the top picks of the best fund managers can outclass the market by a solid margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Chris Hohn

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s view the key hedge fund action surrounding Union Pacific Corporation (NYSE:UNP).

Do Hedge Funds Think UNP Is A Good Stock To Buy Now?

At first quarter’s end, a total of 75 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from the previous quarter. The graph below displays the number of hedge funds with bullish position in UNP over the last 23 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, TCI Fund Management, managed by Chris Hohn, holds the most valuable position in Union Pacific Corporation (NYSE:UNP). TCI Fund Management has a $1.3261 billion position in the stock, comprising 3.9% of its 13F portfolio. Coming in second is Fisher Asset Management, led by Ken Fisher, holding a $982.5 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Some other professional money managers that hold long positions encompass Eric W. Mandelblatt and Gaurav Kapadia’s Soroban Capital Partners, and Aaron Cowen’s Suvretta Capital Management. In terms of the portfolio weights assigned to each position White Square Capital allocated the biggest weight to Union Pacific Corporation (NYSE:UNP), around 8.04% of its 13F portfolio. Skylands Capital is also relatively very bullish on the stock, earmarking 7.99 percent of its 13F equity portfolio to UNP.

Now, key hedge funds have been driving this bullishness. Skye Global Management, managed by Jaime Sterne, established the largest position in Union Pacific Corporation (NYSE:UNP). Skye Global Management had $77.5 million invested in the company at the end of the quarter. Zach Schreiber’s Point State Capital also made a $57.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Alexander Mitchell’s Scopus Asset Management, Frank Fu’s CaaS Capital, and Greg Poole’s Echo Street Capital Management.

Let’s check out hedge fund activity in other stocks similar to Union Pacific Corporation (NYSE:UNP). These stocks are The Unilever Group (NYSE:UL), Linde plc (NYSE:LIN), BHP Group (NYSE:BBL), Morgan Stanley (NYSE:MS), SAP SE (NYSE:SAP), Amgen, Inc. (NASDAQ:AMGN), and HDFC Bank Limited (NYSE:HDB). This group of stocks’ market caps resemble UNP’s market cap.

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As you can see these stocks had an average of 36.9 hedge funds with bullish positions and the average amount invested in these stocks was $2363 million. That figure was $4685 million in UNP’s case. Morgan Stanley (NYSE:MS) is the most popular stock in this table. On the other hand SAP SE (NYSE:SAP) is the least popular one with only 19 bullish hedge fund positions. Union Pacific Corporation (NYSE:UNP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for UNP is 86.7. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 17.2% in 2021 through June 11th and beat the market again by 3.3 percentage points. Unfortunately UNP wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on UNP were disappointed as the stock returned 0.9% since the end of March (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

Disclosure: None. This article was originally published at Insider Monkey.

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