Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Umpqua Holdings Corp (NASDAQ:UMPQ) shareholders have witnessed an increase in hedge fund sentiment of late, with a net total of 3 more hedgies now owning the stock. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Assured Guaranty Ltd. (NYSE:AGO), Bank Of The Ozarks Inc (NASDAQ:OZRK), and Akorn, Inc. (NASDAQ:AKRX) to gather more data points.
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Hedge fund activity in Umpqua Holdings Corp (NASDAQ:UMPQ)
At the end of the third quarter, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, an 18% gain from the previous quarter. Hedge fund ownership has increased in each of the last three quarters, pushing it to its highest total in the last year. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Millennium Management, managed by Israel Englander, holds the biggest position in Umpqua Holdings Corp (NASDAQ:UMPQ). Millennium Management has a $75.9 million position in the stock. The second largest stake is held by Fisher Asset Management, led by Ken Fisher, holding a $73.4 million position. Some other hedge funds and institutional investors with similar optimism comprise Chuck Royce’s Royce & Associates, Mark Lee’s Forest Hill Capital and John Overdeck and David Siegel’s Two Sigma Advisors.
Now, key hedge funds were leading the bulls’ herd. Blue Mountain Capital, managed by Andrew Feldstein and Stephen Siderow, initiated the most valuable position in Umpqua Holdings Corp (NASDAQ:UMPQ). Blue Mountain Capital had $1.1 million invested in the company at the end of the quarter. Solomon Kumin’s Folger Hill Asset Management also initiated a $1 million position during the quarter. The following funds were also among the new UMPQ investors: Glenn Russell Dubin’s Highbridge Capital Management and David Costen Haley’s HBK Investments.
Let’s go over hedge fund activity in other stocks similar to Umpqua Holdings Corp (NASDAQ:UMPQ). We will take a look at Assured Guaranty Ltd. (NYSE:AGO), Bank Of The Ozarks Inc (NASDAQ:OZRK), Akorn, Inc. (NASDAQ:AKRX), and Thor Industries, Inc. (NYSE:THO). This group of stocks’ market valuations resemble UMPQ’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AGO | 32 | 410375 | 0 |
| OZRK | 22 | 365278 | 6 |
| AKRX | 28 | 500562 | -6 |
| THO | 25 | 317743 | 2 |
As you can see these stocks had an average of 26.75 hedge funds with bullish positions and the average amount invested in these stocks was $398 million. That figure was $198 million in UMPQ’s case. Assured Guaranty Ltd. (NYSE:AGO) is the most popular stock in this table. On the other hand Bank Of The Ozarks Inc (NASDAQ:OZRK) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocks Umpqua Holdings Corp (NASDAQ:UMPQ) is even less popular than OZRK. 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 fully behind this stock yet, though sentiment is growing stronger. 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
