Concerns over rising interest rates and expected further rate increases have hit several stocks hard during the fourth quarter. NASDAQ and Russell 2000 indices were already in correction territory. More importantly, Russell 2000 ETF (IWM) underperformed the larger S&P 500 ETF (SPY) by nearly 7 percentage points in the fourth quarter. Hedge funds and institutional investors tracked by Insider Monkey usually invest a disproportionate amount of their portfolios in smaller cap stocks. We have been receiving indications that hedge funds were paring back their overall exposure and this is one of the factors behind the recent movements in major indices. In this article, we will take a closer look at hedge fund sentiment towards Univest Corp. of PA (NASDAQ:UVSP).
Is Univest Corp. of PA (NASDAQ:UVSP) a marvelous stock to buy now? Money managers are reducing their bets on the stock. The number of bullish hedge fund bets fell by 2 lately. Our calculations also showed that UVSP isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Let’s view the fresh hedge fund action encompassing Univest Corp. of PA (NASDAQ:UVSP).
How have hedgies been trading Univest Corp. of PA (NASDAQ:UVSP)?
Heading into the first quarter of 2019, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of -29% from the previous quarter. By comparison, 9 hedge funds held shares or bullish call options in UVSP a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Univest Corp. of PA (NASDAQ:UVSP), with a stake worth $19.8 million reported as of the end of December. Trailing Renaissance Technologies was Citadel Investment Group, which amassed a stake valued at $1.8 million. Millennium Management, Two Sigma Advisors, and D E Shaw were also very fond of the stock, giving the stock large weights in their portfolios.
Since Univest Corp. of PA (NASDAQ:UVSP) has faced declining sentiment from the aggregate hedge fund industry, it’s easy to see that there were a few money managers that decided to sell off their full holdings in the third quarter. Intriguingly, Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital dropped the largest stake of the “upper crust” of funds watched by Insider Monkey, valued at about $1.5 million in stock. Cliff Asness’s fund, AQR Capital Management, also sold off its stock, about $0.6 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 2 funds in the third quarter.
Let’s check out hedge fund activity in other stocks similar to Univest Corp. of PA (NASDAQ:UVSP). These stocks are John B. Sanfilippo & Son, Inc. (NASDAQ:JBSS), ChipMOS Technologies (Bermuda) Ltd (NASDAQ:IMOS), Hanmi Financial Corp (NASDAQ:HAFC), and McEwen Mining Inc (NYSE:MUX). All of these stocks’ market caps are similar to UVSP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| JBSS | 10 | 93482 | 2 |
| IMOS | 1 | 24246 | -1 |
| HAFC | 10 | 33448 | -2 |
| MUX | 5 | 5751 | 0 |
| Average | 6.5 | 39232 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.5 hedge funds with bullish positions and the average amount invested in these stocks was $39 million. That figure was $25 million in UVSP’s case. John B. Sanfilippo & Son, Inc. (NASDAQ:JBSS) is the most popular stock in this table. On the other hand ChipMOS Technologies (Bermuda) Ltd (NASDAQ:IMOS) is the least popular one with only 1 bullish hedge fund positions. Univest Corp. of PA (NASDAQ:UVSP) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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. Unfortunately UVSP wasn’t nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); UVSP investors were disappointed as the stock returned 13.8% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
