Should You Avoid The Western Union Company (WU)?

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Judging by the fact that The Western Union Company (NYSE:WU) has experienced falling interest from the aggregate hedge fund industry, it’s safe to say that there exists a select few fund managers that slashed their full holdings heading into Q4. Interestingly, Jim Simons’s Renaissance Technologies cut the biggest stake of the 700 funds monitored by Insider Monkey, valued at close to $25.5 million in stock, and Israel Englander’s Millennium Management was right behind this move, as the fund cut about $13.3 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 7 funds heading into Q4.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as The Western Union Company (NYSE:WU) but similarly valued. These stocks are Annaly Capital Management, Inc. (NYSE:NLY), Affiliated Managers Group, Inc. (NYSE:AMG), HollyFrontier Corp (NYSE:HFC), and Pentair plc. Ordinary Share (NYSE:PNR). This group of stocks’ market valuations resemble WU’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NLY 23 267347 3
AMG 34 547877 7
HFC 40 1023227 14
PNR 23 1080944 4

As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $730 million. That figure was $885 million in WU’s case. HollyFrontier Corp (NYSE:HFC) is the most popular stock in this table. On the other hand Annaly Capital Management, Inc. (NYSE:NLY) is the least popular one with only 23 bullish hedge fund positions. The Western Union Company (NYSE:WU) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard HFC might be a better candidate to consider a long position.

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