In this article we will take a look at whether hedge funds think Umpqua Holdings Corp (NASDAQ:UMPQ) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is UMPQ a good stock to buy? Umpqua Holdings Corp (NASDAQ:UMPQ) has experienced a decrease in hedge fund sentiment of late. Umpqua Holdings Corp (NASDAQ:UMPQ) was in 24 hedge funds’ portfolios at the end of June. The all time high for this statistic is 26. There were 25 hedge funds in our database with UMPQ positions at the end of the first quarter. Our calculations also showed that UMPQ isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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Fred Cummings of Elizabeth Park Capital
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Do Hedge Funds Think UMPQ Is A Good Stock To Buy Now?
At the end of June, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -4% from the first quarter of 2020. By comparison, 24 hedge funds held shares or bullish call options in UMPQ a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Pzena Investment Management was the largest shareholder of Umpqua Holdings Corp (NASDAQ:UMPQ), with a stake worth $50 million reported as of the end of June. Trailing Pzena Investment Management was Fisher Asset Management, which amassed a stake valued at $45.5 million. AQR Capital Management, Balyasny Asset Management, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Forest Hill Capital allocated the biggest weight to Umpqua Holdings Corp (NASDAQ:UMPQ), around 3.5% of its 13F portfolio. Elizabeth Park Capital Management is also relatively very bullish on the stock, dishing out 1.87 percent of its 13F equity portfolio to UMPQ.
Seeing as Umpqua Holdings Corp (NASDAQ:UMPQ) has faced bearish sentiment from the smart money, it’s easy to see that there lies a certain “tier” of hedgies that decided to sell off their full holdings heading into Q3. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital sold off the biggest stake of the 750 funds followed by Insider Monkey, worth close to $29.9 million in stock. Paul Tudor Jones’s fund, Tudor Investment Corp, also cut its stock, about $1.9 million worth. These moves are important to note, as aggregate hedge fund interest fell by 1 funds heading into Q3.
Let’s check out hedge fund activity in other stocks similar to Umpqua Holdings Corp (NASDAQ:UMPQ). We will take a look at Home Bancshares, Inc. (Conway, AR) (NASDAQ:HOMB), Urban Outfitters, Inc. (NASDAQ:URBN), Evoqua Water Technologies Corp. (NYSE:AQUA), SpringWorks Therapeutics, Inc. (NASDAQ:SWTX), LGI Homes Inc (NASDAQ:LGIH), Viavi Solutions Inc (NASDAQ:VIAV), and Cerence Inc. (NASDAQ:CRNC). This group of stocks’ market valuations match UMPQ’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HOMB | 18 | 48330 | 12 |
| URBN | 28 | 233376 | 5 |
| AQUA | 22 | 400433 | -1 |
| SWTX | 18 | 1337621 | -4 |
| LGIH | 17 | 55924 | 1 |
| VIAV | 24 | 233675 | -4 |
| CRNC | 21 | 185310 | 1 |
| Average | 21.1 | 356381 | 1.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.1 hedge funds with bullish positions and the average amount invested in these stocks was $356 million. That figure was $223 million in UMPQ’s case. Urban Outfitters, Inc. (NASDAQ:URBN) is the most popular stock in this table. On the other hand LGI Homes Inc (NASDAQ:LGIH) is the least popular one with only 17 bullish hedge fund positions. Umpqua Holdings Corp (NASDAQ:UMPQ) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for UMPQ is 63.5. 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. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on UMPQ as the stock returned 15.1% since the end of Q2 (through 10/22) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
