We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of Univar Solutions Inc (NYSE:UNVR) based on that data.
Univar Solutions Inc (NYSE:UNVR) was in 32 hedge funds' portfolios at the end of March. UNVR investors should pay attention to a decrease in enthusiasm from smart money in recent months. There were 43 hedge funds in our database with UNVR positions at the end of the previous quarter. Our calculations also showed that UNVR isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 51 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_340075" align="aligncenter" width="392"] Mason Hawkins of Southeastern Asset Management[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020's unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let's view the recent hedge fund action regarding Univar Solutions Inc (NYSE:UNVR).
How have hedgies been trading Univar Solutions Inc (NYSE:UNVR?
At the end of the first quarter, a total of 32 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -26% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards UNVR over the last 18 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, First Pacific Advisors LLC was the largest shareholder of Univar Solutions Inc (NYSE:UNVR, with a stake worth $111.5 million reported as of the end of September. Trailing First Pacific Advisors LLC was FPR Partners, which amassed a stake valued at $101.5 million. Longview Asset Management, Iridian Asset Management, and Lyrical Asset Management 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 Bayberry Capital Partners allocated the biggest weight to Univar Solutions Inc (NYSE:UNVR, around 5.48% of its 13F portfolio. Legion Partners Asset Management is also relatively very bullish on the stock, earmarking 4.9 percent of its 13F equity portfolio to UNVR.
Because Univar Solutions Inc (NYSE:UNVR has faced declining sentiment from the aggregate hedge fund industry, it's easy to see that there exists a select few funds that decided to sell off their full holdings in the first quarter. Intriguingly, Larry Robbins's Glenview Capital said goodbye to the biggest stake of all the hedgies monitored by Insider Monkey, valued at an estimated $139.8 million in stock, and Zach Schreiber's Point State Capital was right behind this move, as the fund dropped about $54 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 11 funds in the first quarter.
Let's now review hedge fund activity in other stocks similar to Univar Solutions Inc (NYSE:UNVR. We will take a look at EQT Corporation (NYSE:EQT), CNO Financial Group Inc (NYSE:CNO), Vicor Corp (NASDAQ:VICR), and Nelnet, Inc. (NYSE:NNI). This group of stocks' market valuations are closest to UNVR's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EQT,30,234166,1 CNO,15,218787,-8 VICR,14,31916,2 NNI,13,81943,-1 Average,18,141703,-1.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $142 million. That figure was $687 million in UNVR's case. EQT Corporation (NYSE:EQT) is the most popular stock in this table. On the other hand Nelnet, Inc. (NYSE:NNI) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Univar Solutions Inc (NYSE:UNVR is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 8.3% in 2020 through the end of May but still managed to beat the market by 13.2 percentage points. Hedge funds were also right about betting on UNVR as the stock returned 44.2% so far in Q2 (through the end of May) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.