We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Peltz’s recent General Electric losses). However, it is still good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Energy Fuels Inc Ordinary Shares (Canada) (NYSEMKT:UUUU).
Energy Fuels Inc Ordinary Shares (Canada) (NYSEMKT:UUUU) has seen an increase in enthusiasm from smart money of late. UUUU was in 6 hedge funds’ portfolios at the end of September. There were 4 hedge funds in our database with UUUU holdings at the end of the previous quarter. Our calculations also showed that UUUU isn’t among the 30 most popular stocks among hedge funds.
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 18 percentage points since May 2014 through December 3, 2018 (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 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to go over the recent hedge fund action regarding Energy Fuels Inc Ordinary Shares (Canada) (NYSEMKT:UUUU).
What have hedge funds been doing with Energy Fuels Inc Ordinary Shares (Canada) (NYSEMKT:UUUU)?
At Q3’s end, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 50% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards UUUU over the last 13 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Energy Fuels Inc Ordinary Shares (Canada) (NYSEMKT:UUUU) was held by Prescott Group Capital Management, which reported holding $1.9 million worth of stock at the end of September. It was followed by CQS Cayman LP with a $1.5 million position. Other investors bullish on the company included Sprott Asset Management, Citadel Investment Group, and PEAK6 Capital Management.
Now, key hedge funds have been driving this bullishness. Prescott Group Capital Management, managed by Phil Frohlich, initiated the biggest position in Energy Fuels Inc Ordinary Shares (Canada) (NYSEMKT:UUUU). Prescott Group Capital Management had $1.9 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also initiated a $0.2 million position during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group.
Let’s now take a look at hedge fund activity in other stocks similar to Energy Fuels Inc Ordinary Shares (Canada) (NYSEMKT:UUUU). We will take a look at New Germany Fund, Inc. (The) (NYSE:GF), Spark Energy, Inc. (NASDAQ:SPKE), Summit Financial Group, Inc. (NASDAQ:SMMF), and ADMA Biologics Inc (NASDAQ:ADMA). This group of stocks’ market valuations resemble UUUU’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GF | 2 | 411 | 1 |
| SPKE | 7 | 13213 | 1 |
| SMMF | 2 | 7665 | -1 |
| ADMA | 10 | 129545 | -1 |
| Average | 5.25 | 37709 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.25 hedge funds with bullish positions and the average amount invested in these stocks was $38 million. That figure was $4 million in UUUU’s case. ADMA Biologics Inc (NASDAQ:ADMA) is the most popular stock in this table. On the other hand New Germany Fund, Inc. (The) (NYSE:GF) is the least popular one with only 2 bullish hedge fund positions. Energy Fuels Inc Ordinary Shares (Canada) (NYSEMKT:UUUU) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ADMA might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
