Should You Avoid Unilever plc (ADR) (UL)?

Judging by the fact that Unilever plc (ADR) (NYSE:UL) has weathered a decline in interest from the smart money, we can see that there lies a certain “tier” of money managers who were dropping their full holdings by the end of the third quarter. Interestingly, Noam Gottesman’s GLG Partners cut the biggest position of all the hedgies monitored by Insider Monkey, comprising an estimated $1.8 million in stock. Ken Griffin’s fund, Citadel Investment Group, also cut its call options, about $1.7 million worth.

Let’s check out hedge fund activity in other stocks similar to Unilever plc (ADR) (NYSE:UL). These stocks are Unilever N.V. (ADR) (NYSE:UN), Citigroup Inc. (NYSE:C), UnitedHealth Group Inc. (NYSE:UNH), and Amgen, Inc. (NASDAQ:AMGN). This group of stocks’ market caps resemble UL’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
UN 11 953634 0
C 97 8707804 0
UNH 52 2703217 -3
AMGN 59 1863803 1

As you can see these stocks had an average of 55 hedge funds with bullish positions and the average amount invested in these stocks was $3.56 billion. That figure was $191 million in UL’s case. Citigroup Inc. (NYSE:C) is the most popular stock in this table. On the other hand Unilever N.V. (ADR) (NYSE:UN) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Unilever plc (ADR) (NYSE:UL) is even less popular than UN. 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