Is Union Bankshares Corporation (NASDAQ:UBSH) a good equity to bet on right now? We like to check what the smart money thinks first before doing extensive research. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to find the winners in the stock market.
Is Union Bankshares Corporation (NASDAQ:UBSH) a buy right now? The smart money is becoming more confident. The number of long hedge fund bets increased by 2 recently. Our calculations also showed that ubsh isn’t among the 30 most popular stocks among hedge funds. UBSH was in 6 hedge funds’ portfolios at the end of the fourth quarter of 2018. There were 4 hedge funds in our database with UBSH holdings at the end of the previous quarter.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. 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 32 percentage points since May 2014 through March 12, 2019 (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 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to analyze the key hedge fund action regarding Union Bankshares Corporation (NASDAQ:UBSH).
Hedge fund activity in Union Bankshares Corporation (NASDAQ:UBSH)
Heading into the first quarter of 2019, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of 50% from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in UBSH over the last 14 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Union Bankshares Corporation (NASDAQ:UBSH) was held by Renaissance Technologies, which reported holding $15.3 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $3.6 million position. Other investors bullish on the company included Marshall Wace LLP, Millennium Management, and EJF Capital.
As aggregate interest increased, some big names have jumped into Union Bankshares Corporation (NASDAQ:UBSH) headfirst. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, created the most valuable position in Union Bankshares Corporation (NASDAQ:UBSH). Marshall Wace LLP had $2.5 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $2.2 million investment in the stock during the quarter. The only other fund with a new position in the stock is Emanuel J. Friedman’s EJF Capital.
Let’s go over hedge fund activity in other stocks similar to Union Bankshares Corporation (NASDAQ:UBSH). We will take a look at Cronos Group Inc. (NASDAQ:CRON), Hamilton Lane Incorporated (NASDAQ:HLNE), Grupo Aeroportuario del Centro Norte, S. A. B. de C. V. (NASDAQ:OMAB), and Washington Real Estate Investment Trust (NYSE:WRE). This group of stocks’ market caps resemble UBSH’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CRON | 6 | 10449 | -6 |
| HLNE | 9 | 40521 | -3 |
| OMAB | 5 | 28844 | 0 |
| WRE | 14 | 95773 | 6 |
| Average | 8.5 | 43897 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.5 hedge funds with bullish positions and the average amount invested in these stocks was $44 million. That figure was $24 million in UBSH’s case. Washington Real Estate Investment Trust (NYSE:WRE) is the most popular stock in this table. On the other hand Grupo Aeroportuario del Centro Norte, S. A. B. de C. V. (NASDAQ:OMAB) is the least popular one with only 5 bullish hedge fund positions. Union Bankshares Corporation (NASDAQ:UBSH) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. A small number of hedge funds were also right about betting on UBSH, though not to the same extent, as the stock returned 23.4% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
