UnitedHealth Group Inc. (NYSE:UNH) was in 55 hedge funds’ portfolio at the end of March. UNH investors should be aware of a decrease in hedge fund interest in recent months. There were 55 hedge funds in our database with UNH holdings at the end of the previous quarter.
To most investors, hedge funds are viewed as worthless, old financial tools of yesteryear. While there are over 8000 funds trading at present, we at Insider Monkey choose to focus on the crème de la crème of this club, close to 450 funds. It is estimated that this group oversees most of all hedge funds’ total capital, and by tracking their top stock picks, we have identified a number of investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Just as important, bullish insider trading sentiment is a second way to parse down the stock market universe. As the old adage goes: there are many incentives for a bullish insider to cut shares of his or her company, but just one, very simple reason why they would initiate a purchase. Many academic studies have demonstrated the valuable potential of this strategy if “monkeys” understand what to do (learn more here).
Keeping this in mind, it’s important to take a look at the latest action surrounding UnitedHealth Group Inc. (NYSE:UNH).
Hedge fund activity in UnitedHealth Group Inc. (NYSE:UNH)
Heading into Q2, a total of 55 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their stakes substantially.
According to our comprehensive database, Boykin Curry’s Eagle Capital Management had the most valuable position in UnitedHealth Group Inc. (NYSE:UNH), worth close to $593.7 million, comprising 3.5% of its total 13F portfolio. Sitting at the No. 2 spot is Orbis Investment Management, managed by William B. Gray, which held a $275.8 million position; the fund has 2.4% of its 13F portfolio invested in the stock. Other hedgies that are bullish include D. E. Shaw’s D E Shaw, John Shapiro’s Chieftain Capital and Bill Miller’s Legg Mason Capital Management.
Due to the fact that UnitedHealth Group Inc. (NYSE:UNH) has experienced bearish sentiment from hedge fund managers, logic holds that there is a sect of fund managers that slashed their entire stakes heading into Q2. It’s worth mentioning that David Stemerman’s Conatus Capital Management sold off the largest stake of the “upper crust” of funds we monitor, valued at an estimated $47.3 million in stock., and Roberto Mignone of Bridger Management was right behind this move, as the fund dumped about $38 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
How have insiders been trading UnitedHealth Group Inc. (NYSE:UNH)?
Insider purchases made by high-level executives is at its handiest when the primary stock in question has seen transactions within the past half-year. Over the last half-year time period, UnitedHealth Group Inc. (NYSE:UNH) has seen 1 unique insiders purchasing, and 9 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to UnitedHealth Group Inc. (NYSE:UNH). These stocks are Humana Inc (NYSE:HUM), Aetna Inc. (NYSE:AET), CIGNA Corporation (NYSE:CI), WellPoint, Inc. (NYSE:WLP), and Express Scripts Holding Company (NASDAQ:ESRX). This group of stocks are the members of the health care plans industry and their market caps resemble UNH’s market cap.