Is Ultrapar Participacoes SA (ADR) (NYSE:UGP) a bargain? Hedge funds are getting less optimistic. The number of long hedge fund positions dropped by 4 in recent months.
To the average investor, there are dozens of metrics investors can use to analyze the equity markets. A pair of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite fund managers can outclass the broader indices by a superb amount (see just how much).
Equally as beneficial, bullish insider trading activity is a second way to parse down the investments you’re interested in. Obviously, there are plenty of stimuli for an upper level exec to cut shares of his or her company, but just one, very clear reason why they would behave bullishly. Many empirical studies have demonstrated the useful potential of this tactic if investors know what to do (learn more here).
With these “truths” under our belt, we’re going to take a peek at the latest action encompassing Ultrapar Participacoes SA (ADR) (NYSE:UGP).
What does the smart money think about Ultrapar Participacoes SA (ADR) (NYSE:UGP)?
At the end of the fourth quarter, a total of 6 of the hedge funds we track held long positions in this stock, a change of -40% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were boosting their stakes substantially.
According to our comprehensive database, Jim Simons’s Renaissance Technologies had the biggest position in Ultrapar Participacoes SA (ADR) (NYSE:UGP), worth close to $77.7 million, comprising 0.2% of its total 13F portfolio. On Renaissance Technologies’s heels is Fisher Asset Management, managed by Ken Fisher, which held a $5.8 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, David Costen Haley’s HBK Investments and Mike Vranos’s Ellington.
Since Ultrapar Participacoes SA (ADR) (NYSE:UGP) has witnessed declining sentiment from the aggregate hedge fund industry, logic holds that there were a few funds who were dropping their positions entirely at the end of the year. Interestingly, Israel Englander’s Millennium Management cut the largest position of the “upper crust” of funds we monitor, valued at close to $2.6 million in stock., and Steven Cohen of SAC Capital Advisors was right behind this move, as the fund said goodbye to about $0.8 million worth. These transactions are important to note, as total hedge fund interest fell by 4 funds at the end of the year.
Insider trading activity in Ultrapar Participacoes SA (ADR) (NYSE:UGP)
Bullish insider trading is most useful when the company in question has seen transactions within the past six months. Over the latest half-year time period, Ultrapar Participacoes SA (ADR) (NYSE:UGP) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Ultrapar Participacoes SA (ADR) (NYSE:UGP). These stocks are Hess Corp. (NYSE:HES), Marathon Oil Corporation (NYSE:MRO), Tesoro Corporation (NYSE:TSO), HollyFrontier Corp (NYSE:HFC), and Murphy Oil Corporation (NYSE:MUR). This group of stocks belong to the oil & gas refining & marketing industry and their market caps are similar to UGP’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Hess Corp. (NYSE:HES) | 35 | 8 | 8 |
| Marathon Oil Corporation (NYSE:MRO) | 40 | 0 | 1 |
| Tesoro Corporation (NYSE:TSO) | 32 | 1 | 3 |
| HollyFrontier Corp (NYSE:HFC) | 35 | 1 | 8 |
| Murphy Oil Corporation (NYSE:MUR) | 24 | 1 | 10 |
With the results shown by our strategies, everyday investors should always keep an eye on hedge fund and insider trading sentiment, and Ultrapar Participacoes SA (ADR) (NYSE:UGP) shareholders fit into this picture quite nicely.
