Is United Technologies Corporation (NYSE:UTX) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before doing days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
United Technologies Corporation (NYSE:UTX) shareholders have witnessed an increase in hedge fund sentiment of late. UTX was in 64 hedge funds' portfolios at the end of the fourth quarter of 2018. There were 59 hedge funds in our database with UTX holdings at the end of the previous quarter. Our calculations also showed that UTX isn't among the 30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (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 27.5% through March 12, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's go over the key hedge fund action surrounding United Technologies Corporation (NYSE:UTX).
How are hedge funds trading United Technologies Corporation (NYSE:UTX)?
At Q4's end, a total of 64 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 8% from the second quarter of 2018. By comparison, 50 hedge funds held shares or bullish call options in UTX a year ago. With hedge funds' sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
More specifically, Viking Global was the largest shareholder of United Technologies Corporation (NYSE:UTX), with a stake worth $743.6 million reported as of the end of September. Trailing Viking Global was Pershing Square, which amassed a stake valued at $594 million. Fisher Asset Management, Soroban Capital Partners, and First Pacific Advisors LLC were also very fond of the stock, giving the stock large weights in their portfolios.