Is Umpqua Holdings Corp (NASDAQ:UMPQ) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is Umpqua Holdings Corp (NASDAQ:UMPQ) ready to rally soon? The smart money was taking a bearish view. The number of bullish hedge fund positions were cut by 1 recently. Umpqua Holdings Corp (NASDAQ:UMPQ) was in 23 hedge funds’ portfolios at the end of September. The all time high for this statistic is 26. Our calculations also showed that UMPQ isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 24 hedge funds in our database with UMPQ positions at the end of the second quarter.
David Harding of Winton Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we’re going to go over the recent hedge fund action surrounding Umpqua Holdings Corp (NASDAQ:UMPQ).
Do Hedge Funds Think UMPQ Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from the previous quarter. By comparison, 26 hedge funds held shares or bullish call options in UMPQ a year ago. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
More specifically, Pzena Investment Management was the largest shareholder of Umpqua Holdings Corp (NASDAQ:UMPQ), with a stake worth $54.5 million reported as of the end of September. Trailing Pzena Investment Management was Fisher Asset Management, which amassed a stake valued at $49.4 million. Holocene Advisors, AQR Capital Management, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Forest Hill Capital allocated the biggest weight to Umpqua Holdings Corp (NASDAQ:UMPQ), around 3.59% of its 13F portfolio. Elizabeth Park Capital Management is also relatively very bullish on the stock, setting aside 1.96 percent of its 13F equity portfolio to UMPQ.
Because Umpqua Holdings Corp (NASDAQ:UMPQ) has experienced declining sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of money managers that slashed their entire stakes by the end of the third quarter. At the top of the heap, Dmitry Balyasny’s Balyasny Asset Management dumped the largest position of the 750 funds monitored by Insider Monkey, worth close to $20.9 million in stock. Ryan Tolkin (CIO)’s fund, Schonfeld Strategic Advisors, also cut its stock, about $7.1 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 1 funds by the end of the third quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Umpqua Holdings Corp (NASDAQ:UMPQ) but similarly valued. We will take a look at H&R Block, Inc. (NYSE:HRB), Matador Resources Co (NYSE:MTDR), Ryder System, Inc. (NYSE:R), Olo Inc. (NYSE:OLO), Clearwater Analytics Holdings Inc. (NYSE:CWAN), TeleTech Holdings, Inc. (NASDAQ:TTEC), and Equitrans Midstream Corporation (NYSE:ETRN). This group of stocks’ market values are closest to UMPQ’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HRB | 25 | 196310 | -5 |
| MTDR | 27 | 364037 | 9 |
| R | 16 | 343458 | -2 |
| OLO | 18 | 131422 | 4 |
| CWAN | 25 | 87247 | 25 |
| TTEC | 18 | 46842 | 6 |
| ETRN | 25 | 257789 | -2 |
| Average | 22 | 203872 | 5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $204 million. That figure was $233 million in UMPQ’s case. Matador Resources Co (NYSE:MTDR) is the most popular stock in this table. On the other hand Ryder System, Inc. (NYSE:R) is the least popular one with only 16 bullish hedge fund positions. Umpqua Holdings Corp (NASDAQ:UMPQ) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for UMPQ is 62.4. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately UMPQ wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on UMPQ were disappointed as the stock returned -3.6% since the end of September (through 12/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Umpqua Holdings Corp (NASDAQ:UMPQ)
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Disclosure: None. This article was originally published at Insider Monkey.
