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We at Insider Monkey have gone over 866 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. In this article, we look at what those funds think of Unity Biotechnology, Inc. (NASDAQ:UBX) based on that data.
Is UBX stock a buy? Unity Biotechnology, Inc. (NASDAQ:UBX) was in 4 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 7. UBX shareholders have witnessed a decrease in hedge fund sentiment in recent months. There were 7 hedge funds in our database with UBX positions at the end of the fourth quarter. Our calculations also showed that UBX isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Michael Gelband of ExodusPoint Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $27 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind let's take a look at the key hedge fund action surrounding Unity Biotechnology, Inc. (NASDAQ:UBX).
Do Hedge Funds Think UBX Is A Good Stock To Buy Now?
At first quarter's end, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -43% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in UBX over the last 23 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Ken Griffin's Citadel Investment Group has the number one position in Unity Biotechnology, Inc. (NASDAQ:UBX), worth close to $0.6 million, amounting to less than 0.1%% of its total 13F portfolio. The second most bullish fund manager is Peter Muller of PDT Partners, with a $0.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that are bullish contain John Overdeck and David Siegel's Two Sigma Advisors, Michael Gelband's ExodusPoint Capital and . In terms of the portfolio weights assigned to each position PDT Partners allocated the biggest weight to Unity Biotechnology, Inc. (NASDAQ:UBX), around 0.03% of its 13F portfolio. ExodusPoint Capital is also relatively very bullish on the stock, setting aside 0.002 percent of its 13F equity portfolio to UBX.
Since Unity Biotechnology, Inc. (NASDAQ:UBX) has faced a decline in interest from the entirety of the hedge funds we track, it's easy to see that there was a specific group of hedgies who sold off their positions entirely last quarter. Intriguingly, Frank Fu's CaaS Capital dumped the biggest position of the 750 funds watched by Insider Monkey, valued at about $0.9 million in stock. Peter Algert's fund, Algert Global, also cut its stock, about $0.3 million worth. These transactions are interesting, as total hedge fund interest was cut by 3 funds last quarter.
Let's now take a look at hedge fund activity in other stocks similar to Unity Biotechnology, Inc. (NASDAQ:UBX). We will take a look at Northwest Pipe Company (NASDAQ:NWPX), BlueCity Holdings Limited (NASDAQ:BLCT), Talis Biomedical Corporation (NASDAQ:TLIS), SmartFinancial, Inc. (NASDAQ:SMBK), Waitr Holdings Inc. (NASDAQ:WTRH), Cogent Biosciences, Inc. (NASDAQ:COGT), and Protective Insurance Corporation (NASDAQ:PTVCA). This group of stocks' market caps resemble UBX's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NWPX,6,41730,-4 BLCT,2,598,0 TLIS,8,112309,8 SMBK,9,24221,3 WTRH,13,53924,-4 COGT,27,170227,-1 PTVCA,2,5545,1 Average,9.6,58365,0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.6 hedge funds with bullish positions and the average amount invested in these stocks was $58 million. That figure was $2 million in UBX's case. Cogent Biosciences, Inc. (NASDAQ:COGT) is the most popular stock in this table. On the other hand BlueCity Holdings Limited (NASDAQ:BLCT) is the least popular one with only 2 bullish hedge fund positions. Unity Biotechnology, Inc. (NASDAQ:UBX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for UBX is 23.1. 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. This is a slightly negative signal and 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 17.2% in 2021 through June 11th and surpassed the market again by 3.3 percentage points. Unfortunately UBX wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); UBX investors were disappointed as the stock returned -21.3% since the end of March (through 6/11) 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 most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.