Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the second quarter. You can find write-ups about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves and analyze what the smart money thinks of Unitil Corporation (NYSE:UTL) based on that data.
Unitil Corporation (NYSE:UTL) investors should be aware of a decrease in enthusiasm from smart money lately. UTL was in 9 hedge funds’ portfolios at the end of the second quarter of 2019. There were 10 hedge funds in our database with UTL holdings at the end of the previous quarter. Our calculations also showed that UTL isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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 40 percentage points since May 2014 through May 30, 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 25.7% through September 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to check out the new hedge fund action regarding Unitil Corporation (NYSE:UTL).
How are hedge funds trading Unitil Corporation (NYSE:UTL)?
Heading into the third quarter of 2019, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -10% from the first quarter of 2019. On the other hand, there were a total of 10 hedge funds with a bullish position in UTL a year ago. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Renaissance Technologies has the most valuable position in Unitil Corporation (NYSE:UTL), worth close to $53.3 million, comprising less than 0.1%% of its total 13F portfolio. Coming in second is Impax Asset Management, managed by Ian Simm, which holds a $21.8 million position; 0.3% of its 13F portfolio is allocated to the stock. Other peers that hold long positions comprise Noam Gottesman’s GLG Partners, Israel Englander’s Millennium Management and Cliff Asness’s AQR Capital Management.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Adage Capital Management. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Citadel Investment Group).
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Unitil Corporation (NYSE:UTL) but similarly valued. We will take a look at Stoneridge, Inc. (NYSE:SRI), Rudolph Technologies Inc (NYSE:RTEC), Golden Ocean Group Limited (NASDAQ:GOGL), and Douglas Dynamics Inc (NYSE:PLOW). This group of stocks’ market caps are similar to UTL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SRI | 15 | 88433 | -5 |
| RTEC | 8 | 93352 | -4 |
| GOGL | 7 | 185539 | -1 |
| PLOW | 7 | 9945 | -4 |
| Average | 9.25 | 94317 | -3.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $94 million. That figure was $86 million in UTL’s case. Stoneridge, Inc. (NYSE:SRI) is the most popular stock in this table. On the other hand Golden Ocean Group Limited (NASDAQ:GOGL) is the least popular one with only 7 bullish hedge fund positions. Unitil Corporation (NYSE:UTL) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on UTL as the stock returned 6.6% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
