Smart Money Is Not Sold On Under Armour Inc (UA) Turnaround

Since Under Armour Inc (NYSE:UA) has witnessed a decline in interest from the entirety of the hedge funds we track, it’s safe to say that there is a sect of fund managers who sold off their positions entirely by the end of the third quarter. Interestingly, Alexander Mitchell’s Scopus Asset Management cut the biggest position of all the hedgies tracked by Insider Monkey, valued at an estimated $65.4 million in call options, while Ken Griffin’s Citadel Investment Group was right behind this move, as the fund dumped its call options position worth about $29.5 million (which retaining its long position). These transactions are important to note, as aggregate hedge fund interest fell by 3 funds by the end of the third quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Under Armour Inc (NYSE:UA) but similarly valued. We will take a look at Hartford Financial Services Group Inc (NYSE:HIG), International Paper Company (NYSE:IP), Realty Income Corp (NYSE:O), and Analog Devices, Inc. (NASDAQ:ADI). This group of stocks’ market values are similar to UA’s market value.

As you can see these stocks had an average of 29.25 hedge funds with bullish positions and the average amount invested in these stocks was $738 million. That figure was $528 million in UA’s case. Hartford Financial Services Group Inc (NYSE:HIG) is the most popular stock in this table. On the other hand Realty Income Corp (NYSE:O) is the least popular one with only 20 bullish hedge fund positions. Under Armour Inc (NYSE:UA) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard HIG might be a better candidate to consider a long position.

Disclosure: None