We can judge whether Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, research shows that these picks historically outperformed the market when we factor in known risk factors.
There were 16 funds in our database bullish on Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU) at the end of September, compared to 12 funds at the end of June. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Enterprise Products Partners L.P. (NYSE:EPD), China Life Insurance Company Ltd. (ADR) (NYSE:LFC), and The Chubb Corporation (NYSE:CB) to gather more data points.
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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Keeping this in mind, let’s go over the latest action encompassing Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU).
How have hedgies been trading Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU)?
At the end of September, a total of 16 investors tracked by Insider Monkey were bullish on Mitsubishi UFJ Financial Group, a change of 33% from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards MTU over the last five quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Fisher Asset Management, led by Ken Fisher, holds the biggest position in Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU). Fisher Asset Management has a $42.8 million position in the stock, comprising 0.1% of its 13F portfolio. On Fisher Asset Management’s heels is Jim Simons of Renaissance Technologies, with a $16.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism comprise Mike Masters’ Masters Capital Management, David E. Shaw’s D E Shaw, and Israel Englander’s Millennium Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Consequently, some big names were breaking ground themselves. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital created the most valuable position in Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU). Arrowstreet Capital had $1.5 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also made a $0.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Charles Davidson’s Wexford Capital, Ernest Chow and Jonathan Howe’s Sensato Capital Management, and Mike Vranos’ Ellington.
Let’s now take a look at hedge fund activity in other stocks similar to Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU). These stocks are Enterprise Products Partners L.P. (NYSE:EPD), China Life Insurance Company Ltd. (ADR) (NYSE:LFC), The Chubb Corporation (NYSE:CB), and NextEra Energy, Inc. (NYSE:NEE). This group of stocks’ market valuations match MTU’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EPD | 30 | 522615 | 2 |
| LFC | 12 | 47740 | 1 |
| CB | 33 | 1276402 | -4 |
| NEE | 35 | 997374 | 3 |
As you can see these stocks had an average of 28 funds with bullish positions and the average amount invested in these stocks was $711 million. That figure was just $87 million in MTU’s case. NextEra Energy, Inc. (NYSE:NEE) is the most popular stock in this table, while China Life Insurance Company Ltd. (ADR) (NYSE:LFC) is the least popular one with only 12 bullish hedge fund positions. Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU) 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 NextEra Energy, Inc. (NYSE:NEE) might be a better candidate to consider taking a long position in.
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