There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Jeff Ubben, George Soros and Carl Icahn think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other elite funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Unisys Corporation (NYSE:UIS).
Unisys Corporation (NYSE:UIS) has seen an increase in hedge fund sentiment of late. UIS was in 17 hedge funds’ portfolios at the end of the fourth quarter of 2018. There were 14 hedge funds in our database with UIS positions at the end of the previous quarter. Our calculations also showed that UIS isn’t among the 30 most popular stocks among hedge funds.
To most traders, hedge funds are perceived as worthless, outdated investment vehicles of years past. While there are over 8000 funds trading at the moment, Our researchers choose to focus on the bigwigs of this group, approximately 750 funds. These investment experts orchestrate the majority of the smart money’s total capital, and by monitoring their inimitable stock picks, Insider Monkey has discovered several investment strategies that have historically outperformed the S&P 500 index. Insider Monkey’s flagship hedge fund strategy outpaced the S&P 500 index by nearly 5 percentage points per annum since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 27.5% since February 2017 (through March 12th) even though the market was up nearly 25% during the same period. We just shared a list of 6 short targets in our latest quarterly update and they are already down an average of 6% in less than a month.
We’re going to analyze the key hedge fund action surrounding Unisys Corporation (NYSE:UIS).
What have hedge funds been doing with Unisys Corporation (NYSE:UIS)?
At the end of the fourth quarter, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 21% from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in UIS over the last 14 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Portolan Capital Management held the most valuable stake in Unisys Corporation (NYSE:UIS), which was worth $24.8 million at the end of the fourth quarter. On the second spot was Royce & Associates which amassed $19.7 million worth of shares. Moreover, D E Shaw, Millennium Management, and AQR Capital Management were also bullish on Unisys Corporation (NYSE:UIS), allocating a large percentage of their portfolios to this stock.
Now, specific money managers were breaking ground themselves. AQR Capital Management, managed by Cliff Asness, initiated the largest position in Unisys Corporation (NYSE:UIS). AQR Capital Management had $8.1 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also made a $0.6 million investment in the stock during the quarter. The other funds with brand new UIS positions are Dmitry Balyasny’s Balyasny Asset Management, Minhua Zhang’s Weld Capital Management, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Unisys Corporation (NYSE:UIS) but similarly valued. These stocks are El Pollo LoCo Holdings Inc (NASDAQ:LOCO), Intellia Therapeutics, Inc. (NASDAQ:NTLA), Heidrick & Struggles International, Inc. (NASDAQ:HSII), and Ra Pharmaceuticals, Inc. (NASDAQ:RARX). This group of stocks’ market values are closest to UIS’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.25 hedge funds with bullish positions and the average amount invested in these stocks was $77 million. That figure was $97 million in UIS’s case. Heidrick & Struggles International, Inc. (NASDAQ:HSII) is the most popular stock in this table. On the other hand Intellia Therapeutics, Inc. (NASDAQ:NTLA) is the least popular one with only 10 bullish hedge fund positions. Unisys Corporation (NYSE:UIS) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately UIS wasn’t nearly as popular as these 15 stock and hedge funds that were betting on UIS were disappointed as the stock returned -6.7% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.