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.
United Microelectronics Corp (ADR) (NYSE:UMC) has experienced a decrease in support from the world’s most elite money managers recently. United Microelectronics Corp (ADR) (NYSE:UMC) was in 9 hedge funds’ portfolios at the end of the third quarter of 2015. There were 11 hedge funds in our database with United Microelectronics Corp (ADR) (NYSE:UMC) positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article, we will examine companies such as Compania Cervecerias Unidas S.A. (ADR) (NYSE:CCU), Biomed Realty Trust Inc (NYSE:BMR), and American Campus Communities, Inc. (NYSE:ACC) to gather more data points.
Follow United Microelectronics Corp (NYSE:UMC)
Follow United Microelectronics Corp (NYSE:UMC)
If you’d ask most investors, hedge funds are seen as worthless, old investment vehicles of years past. While there are more than 8000 funds with their doors open today, our experts choose to focus on the bigwigs of this club, around 700 funds. These investment experts watch over the bulk of the smart money’s total capital, and by keeping an eye on their first-class investments, Insider Monkey has brought to light numerous investment strategies that have historically outpaced the market. Insider Monkey’s small-cap hedge fund strategy outperformed the S&P 500 index by 12 percentage points a year for a decade in their back tests.
Now, let’s review the latest action surrounding United Microelectronics Corp (ADR) (NYSE:UMC).
Hedge fund activity in United Microelectronics Corp (ADR) (NYSE:UMC)
Heading into Q4, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a drop of 18% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies holds the number one position in United Microelectronics Corp (ADR) (NYSE:UMC). Renaissance Technologies has a $6.2 million position in the stock, comprising less than 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Simon Sadler of Segantii Capital, with a $4.1 million position; 0.9% of its 13F portfolio is allocated to the stock. Some other members of the smart money with similar optimism encompass Michael Hintze’s CQS Cayman LP, Satyen Mehta’s Neon Liberty Capital Management, and D E Shaw.
Judging by the fact that United Microelectronics Corp (ADR) (NYSE:UMC) has witnessed a falling interest from the entirety of the hedge funds we track, it’s easy to see that there is a sect of funds who were dropping their full holdings by the end of the third quarter. At the top of the heap, Charles Clough’s Clough Capital Partners cut the biggest investment of the “upper crust” of funds tracked by Insider Monkey, worth about $0.3 million in stock, and David Costen Haley’s HBK Investments was right behind this move, as the fund cut about $0.1 million worth of shares. These moves are important to note, as total hedge fund interest was cut by 2 funds by the end of the third quarter.
Let’s check out hedge fund activity in other stocks similar to United Microelectronics Corp (ADR) (NYSE:UMC). These stocks are Compania Cervecerias Unidas S.A. (ADR) (NYSE:CCU), Biomed Realty Trust Inc (NYSE:BMR), American Campus Communities, Inc. (NYSE:ACC), and AGCO Corporation (NYSE:AGCO). This group of stocks’ market values matches United Microelectronics Corp (ADR) (NYSE:UMC)’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CCU | 8 | 227386 | 2 |
| BMR | 17 | 223498 | 6 |
| ACC | 15 | 105800 | 3 |
| AGCO | 24 | 519980 | 8 |
As you can see, these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $269 million. That figure was $19 million in United Microelectronics Corp (ADR) (NYSE:UMC)’s case. AGCO Corporation (NYSE:AGCO) is the most popular stock in this table. On the other hand, Compania Cervecerias Unidas S.A. (ADR) (NYSE:CCU) is the least popular one with only an 8 bullish hedge fund positions. United Microelectronics Corp (ADR) (NYSE:UMC) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, AGCO Corporation (NYSE:AGCO) might be a better candidate to consider a long position.
