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Is UnitedHealth Group Inc. (UNH) Worthy of Your Portfolio?

Seeing as UnitedHealth Group Inc. (NYSE:UNH) has witnessed bearish sentiment from the smart money, it’s safe to say that there were a few hedge funds who sold off their positions entirely last quarter. Intriguingly, Leon Cooperman’s Omega Advisors dumped the largest investment of the “upper crust” of funds tracked by Insider Monkey, totaling about $69.7 million in ‘call’ options.. Ken Griffin’s fund, Citadel Investment Group, also unloaded all of its call options, about $41.2 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 3 funds last quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as UnitedHealth Group Inc. (NYSE:UNH) but similarly valued. These stocks are Citigroup Inc. (NYSE:C), PetroChina Company Limited (ADR) (NYSE:PTR), HSBC Holdings plc (ADR) (NYSE:HSBC), and Bristol Myers Squibb Co. (NYSE:BMY). This group of stocks’ market valuations are closest to UNH’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
C 97 8707804 0
PTR 11 36044 0
HSBC 14 1058521 -4
BMY 59 2280370 -2

As you can see these stocks had an average of 45 funds with long positions at the end of September and the average amount invested in these stocks was $3.02 billion. That figure was $2.70 billion in UNH’s case. Citigroup Inc. (NYSE:C) is the most popular stock in this table with 97 funds holding shares. On the other hand PetroChina Company Limited (ADR) (NYSE:PTR) is the least popular one with only 11 bullish hedge fund positions. UnitedHealth Group Inc. (NYSE:UNH) 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. In this regard Citigroup might be a better candidate to consider a long position.

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