Financial regulations require hedge funds and high net worth investors who have crossed the $ 100 million threshold to file a report showing their positions at the end of each quarter. While not the intention, these deposits level the playing field to some extent for ordinary investors. The latest round of 13F deposits revealed the funds’ positions on September 30. At Insider Monkey, we’ve created a comprehensive database of over 867 of these established hedge funds and famous value investor records. In this article, we take a look at how these elite funds and top investors traded the Western Union Company (NYSE: WU) based on these deposits.
Is WU a good stock to buy? The Western Union Company (NYSE: WU) was listed in 27 hedge fund portfolios at the end of September. The all-time high for this statistic is 36. WU shareholders have witnessed a decline in the activity of the world’s largest hedge funds in recent months. There were 31 hedge funds in our database with WU holdings at the end of June. Our calculations also showed that WU is not in the top 30 most popular stocks among hedge funds (click for Q3 rank).
At Insider Monkey, we scour multiple sources to uncover the next big investing idea. For example, lithium prices have more than doubled in the past year, so we’re going through lists like the top 10 electric vehicle stocks to pick the next Tesla that will deliver 10x performance. Even though we only recommend positions in a tiny fraction of the companies we analyze, we check as many stocks as possible. With all of that in mind, we’re going to review new hedge fund action regarding The Western Union Company (NYSE: WU).
Blair Levinsky of Waratah Capital Advisors
Do hedge funds think WU is a good stock to buy now?
At the end of the third quarter, a total of 27 of the hedge funds tracked by Insider Monkey were holding long positions in this stock, a change of -13% from the second quarter of 2021. By comparison, 36 hedge funds were holding stocks or bullish call options in WU. one year ago. With hedge fund positions taking their usual ebb and flow, there are a few notable hedge fund managers who were increasing their stakes significantly (or already accumulating large positions).
Of these funds, DE Shaw had the largest stake in The Western Union Company (NYSE: WU), which stood at $ 68.8 million at the end of the third quarter. In second place was Two Sigma Advisors, which raised $ 61.3 million in stocks. AQR Capital Management, GLG Partners and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders in the company. In terms of the portfolio weights assigned to each position, Sciencast Management assigned the greatest weight to The Western Union Company (NYSE: WU), approximately 0.44% of its 13F portfolio. Gotham Asset Management is also relatively very bullish on the stock, distributing 0.27% of its 13F equity portfolio to WU.
Given that The Western Union Company (NYSE: WU) has seen a decline in interest from the overall hedge fund industry, it is easy to see that there are a few select fund managers who have reduced the entire of their holdings before the fourth quarter. Interestingly, Renaissance Technologies lost the largest position of all hedges monitored by Insider Monkey, worth nearly $ 15.2 million in shares. Jinghua Yan’s fund, TwinBeech Capital, also bid farewell to its shares, valued at around $ 3.1 million. These deals are interesting as overall hedge fund interest fell by 4 funds as the fourth quarter approached.
Let’s take a look at hedge fund activity in other stocks similar to The Western Union Company (NYSE: WU). These stocks are Sealed Air Corporation (NYSE: SEE), Under Armor Inc (NYSE: UA), Rexford Industrial Realty Inc (NYSE: REXR), Phillips 66 Partners LP (NYSE: PSXP), The Scotts Miracle-Gro Company (NYSE: SMG), Ralph Lauren Corporation (NYSE: RL) and Pinnacle West Capital Corporation (NYSE: PNW). The market value of this group of shares resembles the market value of WU.
[table] Ticker, number of HF with positions, total value of HF positions (x1000), change of HF position SEE, 33.626876.5 UA, 48.1643556, -3 REXR, 29.358442.8 PSXP, 5.31682.0 SMG, 30.257473, -2 RL, 25.444724, -7 PNW, 21.175044.3 Medium, 27.3.505400.0.6 [/table]
Check the table here if you have formatting issues.
As you can see, these stocks had an average of 27.3 hedge funds with bullish positions and the average amount invested in these stocks was $ 505 million. That figure was $ 235 million in the case of WU. Under Armor Inc (NYSE: UA) is the most popular action in this table. On the other hand, Phillips 66 Partners LP (NYSE: PSXP) is the least popular with only 5 bullish hedge fund positions. The Western Union Company (NYSE: WU) isn’t the least popular stock in this group, but hedge fund interest is still below average. Our overall hedge fund sentiment score for WU is 49.1. Stocks with a 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 negative signal and we prefer to spend our time researching the stocks that hedge funds are accumulating on. Our calculations showed that the 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 31.1% in 2021 through December 9 and again topped the market by 5.1 percentage points. Unfortunately, WU was not as popular as these 5 stocks (hedge fund sentiment was rather bearish); WU investors were disappointed as the stock has returned -10.8% since late September (through 9/12) and has underperformed the market. If you are looking to invest in large cap stocks with huge upside potential, you should check out the 5 most popular stocks among hedge funds, as most of these stocks have already outperformed the market in 2021.
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Disclosure: none. This article originally appeared on Insider Monkey.