Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Universal Health Services, Inc. (NYSE:UHS) based on that data.
Is Universal Health Services, Inc. (NYSE:UHS) ready to rally soon? Hedge funds were taking an optimistic view. The number of bullish hedge fund positions went up by 2 lately. Universal Health Services, Inc. (NYSE:UHS) was in 43 hedge funds’ portfolios at the end of September. The all time high for this statistic is 44. Our calculations also showed that UHS isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 41 hedge funds in our database with UHS positions at the end of the second quarter.
Donald Sussman of Paloma Partners
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now let’s take a gander at the fresh hedge fund action regarding Universal Health Services, Inc. (NYSE:UHS).
Do Hedge Funds Think UHS Is A Good Stock To Buy Now?
At the end of September, a total of 43 of the hedge funds tracked by Insider Monkey were long this stock, a change of 5% from the previous quarter. On the other hand, there were a total of 34 hedge funds with a bullish position in UHS a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Camber Capital Management was the largest shareholder of Universal Health Services, Inc. (NYSE:UHS), with a stake worth $200.6 million reported as of the end of September. Trailing Camber Capital Management was Glenview Capital, which amassed a stake valued at $121.6 million. Partner Fund Management, Arrowstreet Capital, and Healthcor Management LP were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Solel Partners allocated the biggest weight to Universal Health Services, Inc. (NYSE:UHS), around 9.42% of its 13F portfolio. Camber Capital Management is also relatively very bullish on the stock, setting aside 6.18 percent of its 13F equity portfolio to UHS.
As one would reasonably expect, some big names have been driving this bullishness. Point72 Asset Management, managed by Steve Cohen, created the most outsized position in Universal Health Services, Inc. (NYSE:UHS). Point72 Asset Management had $17.5 million invested in the company at the end of the quarter. Frank Fu’s CaaS Capital also initiated a $14.8 million position during the quarter. The other funds with new positions in the stock are Dmitry Balyasny’s Balyasny Asset Management, Paul Tudor Jones’s Tudor Investment Corp, and Alec Litowitz and Ross Laser’s Magnetar Capital.
Let’s go over hedge fund activity in other stocks similar to Universal Health Services, Inc. (NYSE:UHS). These stocks are Axovant Sciences Ltd (NYSE:AXON), Lamar Advertising Company (NASDAQ:LAMR), Natura &Co Holding S.A. (NYSE:NTCO), C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW), Regency Centers Corp (NYSE:REG), Cna Financial Corporation (NYSE:CNA), and Penn National Gaming, Inc (NASDAQ:PENN). This group of stocks’ market values match UHS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AXON | 32 | 529860 | 8 |
| LAMR | 30 | 445462 | -2 |
| NTCO | 6 | 46852 | 1 |
| CHRW | 20 | 287994 | -11 |
| REG | 19 | 158467 | -6 |
| CNA | 12 | 63809 | -1 |
| PENN | 38 | 1080780 | -2 |
| Average | 22.4 | 373318 | -1.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.4 hedge funds with bullish positions and the average amount invested in these stocks was $373 million. That figure was $751 million in UHS’s case. Penn National Gaming, Inc (NASDAQ:PENN) is the most popular stock in this table. On the other hand Natura &Co Holding S.A. (NYSE:NTCO) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Universal Health Services, Inc. (NYSE:UHS) is more popular among hedge funds. Our overall hedge fund sentiment score for UHS is 86.3. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately UHS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on UHS were disappointed as the stock returned -14.1% since the end of the third quarter (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
