Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
In this article, we are going to discuss the latest hedge fund activity surrounding Unit Corporation (NYSE:UNT). Overall, the stock saw an increase in hedge fund sentiment during the third quarter, as the number of funds tracked by Insider Monkey long the stock went up to 17 from 14. At the end of this article we will also compare UNT to other stocks including Caretrus REIT Inc (NASDAQ:CTRE), Solaredge Technologies Inc (NASDAQ:SEDG), and First PacTrust Bancorp, Inc. (NASDAQ:BANC) to get a better sense of its popularity.
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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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With all of this in mind, let’s review the key action surrounding Unit Corporation (NYSE:UNT).
What have hedge funds been doing with Unit Corporation (NYSE:UNT)?
At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long Unit Corporation (NYSE:UNT), a change of 21% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in UNT over the last five quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Chuck Royce’s Royce & Associates has the most valuable position in Unit Corporation (NYSE:UNT), worth close to $21 million, amounting to 0.1% of its total 13F portfolio. On Royce & Associates’s heels is Citadel Investment Group, led by Ken Griffin, which holds a $10.6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other professional money managers that are bullish consist of Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Phil Frohlich’s Prescott Group Capital Management and Eric Sprott’s Sprott Asset Management. We should note that Sprott Asset Management is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Consequently, key money managers have jumped into Unit Corporation (NYSE:UNT) headfirst. Hutchin Hill Capital, led by Neil Chriss, assembled the most valuable position in Unit Corporation (NYSE:UNT). Hutchin Hill Capital had $1.7 million invested in the company at the end of the quarter. Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners also made a $700,000 investment in the stock during the quarter. The following funds were also among the new UNT investors: Matthew Tewksbury’s Stevens Capital Management and Cliff Asness’ AQR Capital Management.
Let’s now review hedge fund activity in other stocks similar to Unit Corporation (NYSE:UNT). We will take a look at Caretrus REIT Inc (NASDAQ:CTRE), Solaredge Technologies Inc (NASDAQ:SEDG), First PacTrust Bancorp, Inc. (NASDAQ:BANC), and Meridian Interstate Bancorp, Inc. (NASDAQ:EBSB). This group of stocks’ market valuations are similar to UNT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CTRE | 10 | 47879 | 0 |
| SEDG | 12 | 135132 | 0 |
| BANC | 21 | 77709 | 4 |
| EBSB | 13 | 112923 | -1 |
As you can see these stocks had an average of 14 funds with bullish positions and the average amount invested in these stocks was $93 million. That figure was $67 million in UNT’s case. First PacTrust Bancorp, Inc. (NASDAQ:BANC) is the most popular stock in this table. On the other hand Caretrus REIT Inc (NASDAQ:CTRE) is the least popular one with only 10 investors having reported long positions. Unit Corporation (NYSE:UNT) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard First PacTrust Bancorp, Inc. (NASDAQ:BANC) might be a better candidate to consider taking a long position in.
