We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of Umpqua Holdings Corp (NASDAQ:UMPQ) based on that data.
Umpqua Holdings Corp (NASDAQ:UMPQ) has seen an increase in support from the world’s most elite money managers of late. Our calculations also showed that UMPQ 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’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
We’re going to take a glance at the key hedge fund action regarding Umpqua Holdings Corp (NASDAQ:UMPQ).
What does the smart money think about Umpqua Holdings Corp (NASDAQ:UMPQ)?
Heading into the fourth quarter of 2018, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 18% from the previous quarter. On the other hand, there were a total of 16 hedge funds with a bullish position in UMPQ at the beginning of this year. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
More specifically, Millennium Management was the largest shareholder of Umpqua Holdings Corp (NASDAQ:UMPQ), with a stake worth $153.6 million reported as of the end of September. Trailing Millennium Management was Fisher Asset Management, which amassed a stake valued at $73.4 million. D E Shaw, Two Sigma Advisors, and Renaissance Technologies were also very fond of the stock, giving the stock large weights in their portfolios.
As industrywide interest jumped, key money managers have jumped into Umpqua Holdings Corp (NASDAQ:UMPQ) headfirst. Balyasny Asset Management, managed by Dmitry Balyasny, initiated the biggest position in Umpqua Holdings Corp (NASDAQ:UMPQ). Balyasny Asset Management had $7.5 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $1.4 million position during the quarter. The other funds with brand new UMPQ positions are David Costen Haley’s HBK Investments, George Hall’s Clinton Group, and David Andre and Astro Teller’s Cerebellum Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Umpqua Holdings Corp (NASDAQ:UMPQ) but similarly valued. We will take a look at IBERIABANK Corporation (NASDAQ:IBKC), Jabil Inc. (NYSE:JBL), OneMain Holdings Inc (NYSE:OMF), and CACI International Inc (NYSE:CACI). This group of stocks’ market values are similar to UMPQ’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IBKC | 21 | 387072 | 5 |
| JBL | 22 | 298289 | 1 |
| OMF | 26 | 318605 | 4 |
| CACI | 20 | 96681 | 6 |
| Average | 22.25 | 275162 | 4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.25 hedge funds with bullish positions and the average amount invested in these stocks was $275 million. That figure was $303 million in UMPQ’s case. OneMain Holdings Inc (NYSE:OMF) is the most popular stock in this table. On the other hand CACI International Inc (NYSE:CACI) is the least popular one with only 20 bullish hedge fund positions. Compared to these stocks Umpqua Holdings Corp (NASDAQ:UMPQ) is even less popular than CACI. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
Disclosure: None. This article was originally published at Insider Monkey.
