There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other elite funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Unifi, Inc. (NYSE:UFI).
Unifi, Inc. (NYSE:UFI) was in 14 hedge funds’ portfolios at the end of September. UFI investors should be aware of an increase in hedge fund interest in recent months. There were 13 hedge funds in our database with UFI positions at the end of the previous quarter. Our calculations also showed that UFI isn’t among the 30 most popular stocks among hedge funds.
In the eyes of most stock holders, hedge funds are assumed to be underperforming, outdated financial vehicles of years past. While there are more than 8,000 funds with their doors open today, Our experts look at the masters of this club, approximately 700 funds. It is estimated that this group of investors have their hands on the lion’s share of the smart money’s total asset base, and by keeping track of their inimitable stock picks, Insider Monkey has identified a few investment strategies that have historically surpassed the market. Insider Monkey’s flagship hedge fund strategy exceeded the S&P 500 index by 6 percentage points annually since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 24% since February 2017 (through December 3rd) even though the market was up nearly 23% during the same period. We just shared a list of 11 short targets in our latest quarterly update.
We’re going to take a glance at the recent hedge fund action regarding Unifi, Inc. (NYSE:UFI).
What have hedge funds been doing with Unifi, Inc. (NYSE:UFI)?
At Q3’s end, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 8% from the second quarter of 2018. By comparison, 11 hedge funds held shares or bullish call options in UFI heading into this year. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
More specifically, Impala Asset Management was the largest shareholder of Unifi, Inc. (NYSE:UFI), with a stake worth $42.8 million reported as of the end of September. Trailing Impala Asset Management was ValueAct Capital, which amassed a stake valued at $26.2 million. Royce & Associates, Arrowstreet Capital, and AQR Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
As industrywide interest jumped, specific money managers have jumped into Unifi, Inc. (NYSE:UFI) headfirst. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the most outsized position in Unifi, Inc. (NYSE:UFI). Marshall Wace LLP had $0.2 million invested in the company at the end of the quarter. Alec Litowitz and Ross Laser’s Magnetar Capital also initiated a $0.2 million position during the quarter. The only other fund with a brand new UFI position is Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s check out hedge fund activity in other stocks similar to Unifi, Inc. (NYSE:UFI). These stocks are Prothena Corporation plc (NASDAQ:PRTA), The Cato Corporation (NYSE:CATO), Spartan Motors Inc (NASDAQ:SPAR), and Aberdeen Global Premier Properties Fund (NYSE:AWP). All of these stocks’ market caps are closest to UFI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PRTA | 14 | 245866 | 2 |
| CATO | 19 | 43807 | 3 |
| SPAR | 13 | 41380 | -3 |
| AWP | 1 | 788 | 0 |
| Average | 11.75 | 82960 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.75 hedge funds with bullish positions and the average amount invested in these stocks was $83 million. That figure was $96 million in UFI’s case. The Cato Corporation (NYSE:CATO) is the most popular stock in this table. On the other hand Aberdeen Global Premier Properties Fund (NYSE:AWP) is the least popular one with only 1 bullish hedge fund positions. Unifi, Inc. (NYSE:UFI) 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 CATO might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
