Is Uniti Group Inc. (UNIT) Going To Burn These Hedge Funds ?

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 750 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Uniti Group Inc. (NASDAQ:UNIT) in this article.

Hedge fund interest in Uniti Group Inc. (NASDAQ:UNIT) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare UNIT to other stocks including Enerplus Corporation (NYSE:ERF), 360 Finance, Inc. (NASDAQ:QFIN), and Badger Meter, Inc. (NYSE:BMI) to get a better sense of its popularity. Our calculations also showed that UNIT isn’t among the 30 most popular stocks among hedge funds (see the video below).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

According to most market participants, hedge funds are viewed as underperforming, outdated investment tools of yesteryear. While there are more than 8000 funds trading at present, Our experts hone in on the upper echelon of this group, approximately 750 funds. These money managers watch over the lion’s share of the hedge fund industry’s total asset base, and by following their finest stock picks, Insider Monkey has formulated a few investment strategies that have historically defeated Mr. Market. Insider Monkey’s flagship hedge fund strategy outperformed the S&P 500 index by around 5 percentage points a year since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .

Stuart Zimmer Zimmer Partners

Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s take a glance at the fresh hedge fund action regarding Uniti Group Inc. (NASDAQ:UNIT).

What does smart money think about Uniti Group Inc. (NASDAQ:UNIT)?

At Q2’s end, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. By comparison, 18 hedge funds held shares or bullish call options in UNIT a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with UNIT Positions

When looking at the institutional investors followed by Insider Monkey, Kenneth Mario Garschina’s Mason Capital Management has the number one position in Uniti Group Inc. (NASDAQ:UNIT), worth close to $55.2 million, corresponding to 10.5% of its total 13F portfolio. Coming in second is D E Shaw, managed by D. E. Shaw, which holds a $46.3 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining professional money managers that are bullish comprise Martin Hughes’s Toscafund Asset Management, Daniel Patrick Gibson’s Sylebra Capital Management and Stuart J. Zimmer’s Zimmer Partners.

Since Uniti Group Inc. (NASDAQ:UNIT) has witnessed declining sentiment from hedge fund managers, it’s easy to see that there were a few hedgies that slashed their entire stakes in the second quarter. Intriguingly, Steve Cohen’s Point72 Asset Management cut the biggest investment of the 750 funds tracked by Insider Monkey, totaling close to $10.1 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund sold off about $8.4 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s go over hedge fund activity in other stocks similar to Uniti Group Inc. (NASDAQ:UNIT). We will take a look at Enerplus Corporation (NYSE:ERF), 360 Finance, Inc. (NASDAQ:QFIN), Badger Meter, Inc. (NYSE:BMI), and QEP Resources Inc (NYSE:QEP). All of these stocks’ market caps are closest to UNIT’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ERF 12 130197 -9
QFIN 9 10013 8
BMI 12 114305 -2
QEP 18 256247 -5
Average 12.75 127691 -2

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.75 hedge funds with bullish positions and the average amount invested in these stocks was $128 million. That figure was $184 million in UNIT’s case. QEP Resources Inc (NYSE:QEP) is the most popular stock in this table. On the other hand 360 Finance, Inc. (NASDAQ:QFIN) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Uniti Group Inc. (NASDAQ:UNIT) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately UNIT wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on UNIT were disappointed as the stock returned -17.7% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market in Q3.

Disclosure: None. This article was originally published at Insider Monkey.