United Airlines Holdings Inc (UAL): Hedge Funds Are Nibbling

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards United Airlines Holdings Inc (NASDAQ:UAL).

Is United Airlines Holdings Inc (NASDAQ:UAL) a cheap stock to buy now? Investors who are in the know were buying. The number of long hedge fund positions improved by 1 in recent months. United Airlines Holdings Inc (NASDAQ:UAL) was in 39 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 73. Our calculations also showed that UAL isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

If you’d ask most shareholders, hedge funds are assumed to be worthless, old investment vehicles of the past. While there are over 8000 funds trading at the moment, Our experts hone in on the leaders of this club, around 850 funds. These hedge fund managers handle most of the hedge fund industry’s total capital, and by keeping an eye on their unrivaled equity investments, Insider Monkey has revealed numerous investment strategies that have historically outperformed the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

Brad Gerstner Altimeter Capital

Brad Gerstner of Altimeter Capital

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Do Hedge Funds Think UAL Is A Good Stock To Buy Now?

At the end of June, a total of 39 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards UAL over the last 24 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in United Airlines Holdings Inc (NASDAQ:UAL) was held by Citadel Investment Group, which reported holding $271.5 million worth of stock at the end of June. It was followed by PAR Capital Management with a $226.7 million position. Other investors bullish on the company included Altimeter Capital Management, Masters Capital Management, and Millennium Management. In terms of the portfolio weights assigned to each position PAR Capital Management allocated the biggest weight to United Airlines Holdings Inc (NASDAQ:UAL), around 5.55% of its 13F portfolio. Jade Capital Advisors is also relatively very bullish on the stock, dishing out 4.79 percent of its 13F equity portfolio to UAL.

Now, key hedge funds were leading the bulls’ herd. Plaisance Capital, managed by Dan Kozlowski, created the largest position in United Airlines Holdings Inc (NASDAQ:UAL). Plaisance Capital had $3.6 million invested in the company at the end of the quarter. Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management also initiated a $3.5 million position during the quarter. The following funds were also among the new UAL investors: Dan Kozlowski’s Plaisance Capital, Steve Cohen’s Point72 Asset Management, and Ray Dalio’s Bridgewater Associates.

Let’s also examine hedge fund activity in other stocks similar to United Airlines Holdings Inc (NASDAQ:UAL). These stocks are Rollins, Inc. (NYSE:ROL), Zai Lab Limited (NASDAQ:ZLAB), Nuance Communications Inc. (NASDAQ:NUAN), IDEX Corporation (NYSE:IEX), Entegris Inc (NASDAQ:ENTG), VICI Properties Inc. (NYSE:VICI), and Dynatrace, Inc. (NYSE:DT). This group of stocks’ market caps resemble UAL’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ROL 30 610715 0
ZLAB 36 1029464 4
NUAN 72 5576065 15
IEX 22 945302 3
ENTG 25 1389606 2
VICI 37 664684 -4
DT 50 1949953 -2
Average 38.9 1737970 2.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 38.9 hedge funds with bullish positions and the average amount invested in these stocks was $1738 million. That figure was $704 million in UAL’s case. Nuance Communications Inc. (NASDAQ:NUAN) is the most popular stock in this table. On the other hand IDEX Corporation (NYSE:IEX) is the least popular one with only 22 bullish hedge fund positions. United Airlines Holdings Inc (NASDAQ:UAL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for UAL is 39. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 21.8% in 2021 through October 11th and beat the market again by 4.4 percentage points. Unfortunately UAL wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on UAL were disappointed as the stock returned -5.9% since the end of June (through 10/11) 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 many of these stocks already outperformed the market since 2019.

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