Before we spend many hours researching a company, we’d like to analyze what insiders, hedge funds and billionaire investors think of the stock first. We would like to do so because the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Universal Forest Products, Inc. (NASDAQ:UFPI).
Universal Forest Products, Inc. (NASDAQ:UFPI) was in 18 hedge funds’ portfolios at the end of the third quarter of 2018. UFPI has experienced an increase in hedge fund interest in recent months. There were 17 hedge funds in our database with UFPI positions at the end of the previous quarter. Our calculations also showed that ufpi isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? 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 18 percentage points since May 2014 through December 3, 2018 (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 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s take a look at the fresh hedge fund action regarding Universal Forest Products, Inc. (NASDAQ:UFPI).
How have hedgies been trading Universal Forest Products, Inc. (NASDAQ:UFPI)?
At Q3’s end, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from one quarter earlier. By comparison, 15 hedge funds held shares or bullish call options in UFPI heading into this year. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
Cliff Asness of AQR Capital Management
More specifically, Fisher Asset Management was the largest shareholder of Universal Forest Products, Inc. (NASDAQ:UFPI), with a stake worth $20.3 million reported as of the end of September. Trailing Fisher Asset Management was Tontine Asset Management, which amassed a stake valued at $14.6 million. GLG Partners, AQR Capital Management, and D E Shaw were also very fond of the stock, giving the stock large weights in their portfolios.
As industrywide interest jumped, key hedge funds were leading the bulls’ herd. BlueCrest Capital Mgmt., managed by Michael Platt and William Reeves, initiated the most valuable position in Universal Forest Products, Inc. (NASDAQ:UFPI). BlueCrest Capital Mgmt. had $0.3 million invested in the company at the end of the quarter. Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital also initiated a $0 million position during the quarter.
Let’s check out hedge fund activity in other stocks similar to Universal Forest Products, Inc. (NASDAQ:UFPI). These stocks are Ameris Bancorp (NASDAQ:ABCB), Clear Channel Outdoor Holdings, Inc. (NYSE:CCO), Tenneco Inc (NYSE:TEN), and Xencor Inc (NASDAQ:XNCR). This group of stocks’ market values are closest to UFPI’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ABCB | 13 | 192698 | 3 |
| CCO | 13 | 80607 | 1 |
| TEN | 22 | 123481 | -2 |
| XNCR | 15 | 223205 | 0 |
| Average | 15.75 | 154998 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.75 hedge funds with bullish positions and the average amount invested in these stocks was $155 million. That figure was $79 million in UFPI’s case. Tenneco Inc (NYSE:TEN) is the most popular stock in this table. On the other hand Ameris Bancorp (NASDAQ:ABCB) is the least popular one with only 13 bullish hedge fund positions. Universal Forest Products, Inc. (NASDAQ:UFPI) 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 TEN might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
