The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 866 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about Ultralife Corp. (NASDAQ:ULBI)?
Is ULBI stock a buy? Hedge fund interest in Ultralife Corp. (NASDAQ:ULBI) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that ULBI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare ULBI to other stocks including Lantronix Inc (NASDAQ:LTRX), Lifevantage Corporation (NASDAQ:LFVN), and Odonate Therapeutics, Inc. (NASDAQ:ODT) to get a better sense of its popularity.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Fred DiSanto of Ancora Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a gander at the recent hedge fund action regarding Ultralife Corp. (NASDAQ:ULBI).
Do Hedge Funds Think ULBI Is A Good Stock To Buy Now?
At the end of March, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. By comparison, 3 hedge funds held shares or bullish call options in ULBI a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Renaissance Technologies, holds the largest position in Ultralife Corp. (NASDAQ:ULBI). Renaissance Technologies has a $3.2 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Renaissance Technologies’s heels is Bailard Inc, managed by Thomas Bailard, which holds a $0.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers with similar optimism contain Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital), Frederick DiSanto’s Ancora Advisors and . In terms of the portfolio weights assigned to each position Bailard Inc allocated the biggest weight to Ultralife Corp. (NASDAQ:ULBI), around 0.01% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.0039 percent of its 13F equity portfolio to ULBI.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Millennium 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 Prelude Capital (previously Springbok Capital)).
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Ultralife Corp. (NASDAQ:ULBI) but similarly valued. These stocks are Lantronix Inc (NASDAQ:LTRX), Lifevantage Corporation (NASDAQ:LFVN), Odonate Therapeutics, Inc. (NASDAQ:ODT), Saga Communications, Inc. (NYSE:SGA), Aravive, Inc. (NASDAQ:ARAV), Twin Disc, Incorporated (NASDAQ:TWIN), and Partners Bancorp (NASDAQ:PTRS). This group of stocks’ market caps resemble ULBI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LTRX | 2 | 5515 | -3 |
| LFVN | 5 | 12127 | -3 |
| ODT | 12 | 69260 | -6 |
| SGA | 3 | 11062 | 0 |
| ARAV | 6 | 3665 | 0 |
| TWIN | 5 | 25838 | 0 |
| PTRS | 2 | 993 | 1 |
| Average | 5 | 18351 | -1.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $18 million. That figure was $4 million in ULBI’s case. Odonate Therapeutics, Inc. (NASDAQ:ODT) is the most popular stock in this table. On the other hand Lantronix Inc (NASDAQ:LTRX) is the least popular one with only 2 bullish hedge fund positions. Ultralife Corp. (NASDAQ:ULBI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ULBI is 32.1. 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 ULBI wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); ULBI investors were disappointed as the stock returned 6.9% 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.
Follow Ultralife Corp (NASDAQ:ULBI)
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Disclosure: None. This article was originally published at Insider Monkey.
