While the market driven by short-term sentiment influenced by the accommodative interest rate environment in the US, virus news and stimulus spending, many smart money investors are starting to get cautious towards the current bull run since March, 2020 and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 40,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Ucommune International Ltd (NASDAQ:UK).
Is UK a good stock to buy? Money managers were taking an optimistic view. The number of bullish hedge fund bets advanced by 1 recently. Ucommune International Ltd (NASDAQ:UK) was in 4 hedge funds’ portfolios at the end of March. The all time high for this statistic was 3. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that UK isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 3 hedge funds in our database with UK positions at the end of the fourth quarter.
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Bart Baum of Ionic Capital Management
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Do Hedge Funds Think UK Is A Good Stock To Buy Now?
At Q1’s end, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from the fourth quarter of 2020. By comparison, 0 hedge funds held shares or bullish call options in UK a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Sabby Capital, managed by Hal Mintz, holds the number one position in Ucommune International Ltd (NASDAQ:UK). Sabby Capital has a $0.4 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, managed by Ken Griffin, which holds a $0.2 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other professional money managers that hold long positions consist of Andrew Weiss’s Weiss Asset Management, Andrew Weiss’s Weiss Asset Management and Bart Baum’s Ionic Capital Management. In terms of the portfolio weights assigned to each position Sabby Capital allocated the biggest weight to Ucommune International Ltd (NASDAQ:UK), around 0.08% of its 13F portfolio. Ionic Capital Management is also relatively very bullish on the stock, designating 0.0027 percent of its 13F equity portfolio to UK.
As one would reasonably expect, key hedge funds have jumped into Ucommune International Ltd (NASDAQ:UK) headfirst. Sabby Capital, managed by Hal Mintz, established the largest position in Ucommune International Ltd (NASDAQ:UK). Sabby Capital had $0.4 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.2 million position during the quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Ucommune International Ltd (NASDAQ:UK). These stocks are Resonant Inc. (NASDAQ:RESN), ACNB Corporation (NASDAQ:ACNB), NuCana plc (NASDAQ:NCNA), Atossa Genetics Inc. (NASDAQ:ATOS), Clever Leaves Holdings Inc. (NASDAQ:CLVR), Taiwan Liposome Company, Ltd. (NASDAQ:TLC), and Target Hospitality Corp. (NASDAQ:TH). This group of stocks’ market valuations match UK’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RESN | 6 | 5809 | 2 |
| ACNB | 1 | 1099 | 0 |
| NCNA | 7 | 16780 | 0 |
| ATOS | 6 | 7811 | 3 |
| CLVR | 8 | 28927 | -1 |
| TLC | 1 | 125 | 0 |
| TH | 8 | 13213 | -1 |
| Average | 5.3 | 10538 | 0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.3 hedge funds with bullish positions and the average amount invested in these stocks was $11 million. That figure was $1 million in UK’s case. Clever Leaves Holdings Inc. (NASDAQ:CLVR) is the most popular stock in this table. On the other hand ACNB Corporation (NASDAQ:ACNB) is the least popular one with only 1 bullish hedge fund positions. Ucommune International Ltd (NASDAQ:UK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for UK is 57.4. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and surpassed the market again by 3.3 percentage points. Unfortunately UK wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); UK investors were disappointed as the stock returned -24.7% since the end of March (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.