United Parcel Service, Inc. (NYSE:UPS) was in 42 hedge funds’ portfolio at the end of the first quarter of 2013. UPS investors should pay attention to a decrease in support from the world’s most elite money managers in recent months. There were 47 hedge funds in our database with UPS holdings at the end of the previous quarter.
If you’d ask most shareholders, hedge funds are perceived as slow, old investment vehicles of the past. While there are over 8000 funds in operation at the moment, we look at the aristocrats of this club, around 450 funds. Most estimates calculate that this group has its hands on the lion’s share of the smart money’s total asset base, and by monitoring their best investments, we have spotted a few investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Equally as key, bullish insider trading sentiment is another way to parse down the stock market universe. There are many incentives for an insider to get rid of shares of his or her company, but just one, very simple reason why they would initiate a purchase. Many empirical studies have demonstrated the useful potential of this strategy if piggybackers understand where to look (learn more here).
Now, it’s important to take a peek at the latest action encompassing United Parcel Service, Inc. (NYSE:UPS).
What does the smart money think about United Parcel Service, Inc. (NYSE:UPS)?
At Q1’s end, a total of 42 of the hedge funds we track held long positions in this stock, a change of -11% from the first quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes significantly.
Of the funds we track, Jonathon Jacobson’s Highfields Capital Management had the largest position in United Parcel Service, Inc. (NYSE:UPS), worth close to $495.4 million, accounting for 4.5% of its total 13F portfolio. On Highfields Capital Management’s heels is James Crichton and Adam Weiss of Scout Capital Management, with a $360.8 million position; the fund has 4.6% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Edgar Wachenheim’s Greenhaven Associates, Lee Ainslie’s Maverick Capital and Jonathon Jacobson’s Highfields Capital Management.
Judging by the fact that United Parcel Service, Inc. (NYSE:UPS) has faced declining sentiment from the smart money, it’s easy to see that there exists a select few funds who sold off their full holdings in Q1. Interestingly, Jason Capello’s Merchants’ Gate Capital sold off the biggest stake of the “upper crust” of funds we monitor, worth close to $95.8 million in call options. James Dinan’s fund, York Capital Management, also cut its stock, about $36.7 million worth. These transactions are interesting, as total hedge fund interest dropped by 5 funds in Q1.
What have insiders been doing with United Parcel Service, Inc. (NYSE:UPS)?
Insider trading activity, especially when it’s bullish, is best served when the company in question has seen transactions within the past six months. Over the last six-month time period, United Parcel Service, Inc. (NYSE:UPS) has experienced zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to United Parcel Service, Inc. (NYSE:UPS). These stocks are Hub Group Inc (NASDAQ:HUBG), UTi Worldwide Inc. (NASDAQ:UTIW), Expeditors International of Washington (NASDAQ:EXPD), C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW), and FedEx Corporation (NYSE:FDX). This group of stocks are in the air delivery & freight services industry and their market caps are similar to UPS’s market cap.