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Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the third quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of United Parcel Service, Inc. (NYSE:UPS) based on that data.
Is United Parcel Service, Inc. (NYSE:UPS) a superb stock to buy now? Prominent investors were becoming less hopeful. The number of long hedge fund bets shrunk by 10 recently. United Parcel Service, Inc. (NYSE:UPS) was in 42 hedge funds' portfolios at the end of the third quarter of 2021. The all time high for this statistic is 57. Our calculations also showed that UPS isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 52 hedge funds in our database with UPS holdings at the end of June.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind let's go over the new hedge fund action regarding United Parcel Service, Inc. (NYSE:UPS).
Do Hedge Funds Think UPS Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 42 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -19% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards UPS over the last 25 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Bill & Melinda Gates Foundation Trust held the most valuable stake in United Parcel Service, Inc. (NYSE:UPS), which was worth $415.9 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $275.6 million worth of shares. Renaissance Technologies, Adage Capital Management, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Bill & Melinda Gates Foundation Trust allocated the biggest weight to United Parcel Service, Inc. (NYSE:UPS), around 1.79% of its 13F portfolio. Bronson Point Partners is also relatively very bullish on the stock, earmarking 1.59 percent of its 13F equity portfolio to UPS.
Due to the fact that United Parcel Service, Inc. (NYSE:UPS) has experienced falling interest from the entirety of the hedge funds we track, we can see that there is a sect of fund managers that elected to cut their full holdings last quarter. It's worth mentioning that John Overdeck and David Siegel's Two Sigma Advisors dumped the largest investment of all the hedgies monitored by Insider Monkey, totaling close to $312.7 million in call options. Mike Masters's fund, Masters Capital Management, also cut its call options, about $83.2 million worth. These moves are important to note, as total hedge fund interest was cut by 10 funds last quarter.
Let's go over hedge fund activity in other stocks similar to United Parcel Service, Inc. (NYSE:UPS). We will take a look at Moderna, Inc. (NASDAQ:MRNA), NextEra Energy, Inc. (NYSE:NEE), Linde plc (NYSE:LIN), Charter Communications, Inc. (NASDAQ:CHTR), Philip Morris International Inc. (NYSE:PM), Intuit Inc. (NASDAQ:INTU), and Honeywell International Inc. (NYSE:HON). This group of stocks' market valuations are similar to UPS's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MRNA,49,7315014,12 NEE,53,2374429,-6 LIN,46,4769164,-9 CHTR,74,18794064,-1 PM,48,5924682,2 INTU,64,6152464,-2 HON,45,927738,-12 Average,54.1,6608222,-2.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 54.1 hedge funds with bullish positions and the average amount invested in these stocks was $6608 million. That figure was $1266 million in UPS's case. Charter Communications, Inc. (NASDAQ:CHTR) is the most popular stock in this table. On the other hand Honeywell International Inc. (NYSE:HON) is the least popular one with only 45 bullish hedge fund positions. Compared to these stocks United Parcel Service, Inc. (NYSE:UPS) is even less popular than HON. Our overall hedge fund sentiment score for UPS is 17.1. 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. Hedge funds clearly dropped the ball on UPS as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. A small number of hedge funds were also right about betting on UPS as the stock returned 9.5% since Q3 (through November 30th) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.