Hedge Funds Are Dumping Domtar Corp (USA) (NYSE:UFS)

Domtar Corp (USA) (NYSE:UFS) investors should pay attention to a decrease in enthusiasm from smart money lately.

Domtar Corp (USA) (NYSE:UFS)

If you’d ask most investors, hedge funds are viewed as underperforming, outdated investment vehicles of the past. While there are over 8000 funds in operation at present, we at Insider Monkey hone in on the leaders of this group, around 450 funds. It is estimated that this group has its hands on most of the smart money’s total capital, and by monitoring their top stock picks, we have found a few investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).

Equally as integral, optimistic insider trading activity is another way to parse down the financial markets. As the old adage goes: there are many stimuli for an upper level exec to downsize shares of his or her company, but just one, very simple reason why they would buy. Various empirical studies have demonstrated the impressive potential of this tactic if you know what to do (learn more here).

With these “truths” under our belt, it’s important to take a peek at the key action encompassing Domtar Corp (USA) (NYSE:UFS).

How have hedgies been trading Domtar Corp (USA) (NYSE:UFS)?

Heading into 2013, a total of 21 of the hedge funds we track were long in this stock, a change of -5% from one quarter earlier. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their stakes considerably.

According to our comprehensive database, Jeffrey Gates’s Gates Capital Management had the largest position in Domtar Corp (USA) (NYSE:UFS), worth close to $76 million, comprising 4.7% of its total 13F portfolio. On Gates Capital Management’s heels is Scopia Capital, managed by Matt Sirovich and Jeremy Mindich, which held a $55 million position; the fund has 2.2% of its 13F portfolio invested in the stock. Some other peers that are bullish include John Burbank’s Passport Capital, Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital and Cliff Asness’s AQR Capital Management.

Seeing as Domtar Corp (USA) (NYSE:UFS) has experienced declining sentiment from hedge fund managers, it’s easy to see that there lies a certain “tier” of hedge funds that decided to sell off their entire stakes in Q4. Intriguingly, Craig C. Albert’s Sheffield Asset Management sold off the biggest investment of all the hedgies we monitor, totaling an estimated $9 million in stock., and SAC Subsidiary of CR Intrinsic Investors was right behind this move, as the fund cut about $1 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 1 funds in Q4.

Insider trading activity in Domtar Corp (USA) (NYSE:UFS)

Bullish insider trading is most useful when the company in question has seen transactions within the past 180 days. Over the latest 180-day time period, Domtar Corp (USA) (NYSE:UFS) has seen zero unique insiders buying, and 2 insider sales (see the details of insider trades here).

With the results exhibited by Insider Monkey’s time-tested strategies, everyday investors should always pay attention to hedge fund and insider trading sentiment, and Domtar Corp (USA) (NYSE:UFS) is an important part of this process.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

The 10 Cheapest Places to Retire Abroad

Top 10 Most Expensive Luxury Cars in the World – 2014

Killer Small Business Ideas

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!