Hedge Funds Aren’t Crazy About Domtar Corp (USA) (UFS) Anymore

Seeing as Domtar Corp (USA) (NYSE:UFS) has gone through a decline in interest from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of hedgies that decided to sell off their full holdings by the end of the third quarter. Interestingly, Steve Cohen’s Point72 Asset Management dumped the biggest position of all the investors watched by Insider Monkey, comprising close to $3 million in stock. David Costen Haley’s fund, HBK Investments, also dumped its stock, about $1.3 million worth.

Let’s also examine hedge fund activity in other stocks similar to Domtar Corp (USA) (NYSE:UFS). We will take a look at Washington Federal Inc. (NASDAQ:WAFD), Drew Industries, Inc. (NYSE:DW), Whiting Petroleum Corp (NYSE:WLL), and The Cheesecake Factory Incorporated (NASDAQ:CAKE). All of these stocks’ market caps are similar to UFS’s market cap.

As you can see these stocks had an average of 24.75 hedge funds with bullish positions and the average amount invested in these stocks was $252 million. That figure was $57 million in UFS’s case. Whiting Petroleum Corp (NYSE:WLL) is the most popular stock in this table. On the other hand Washington Federal Inc. (NASDAQ:WAFD) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Domtar Corp (USA) (NYSE:UFS) is even less popular than WAFD. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

Disclosure: None