The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Universal American Corporation (NYSE:UAM).
Universal American Corporation (NYSE:UAM) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 12 hedge funds’ portfolios at the end of the third quarter of 2016. At the end of this article we will also compare UAM to other stocks including Sequential Brands Group Inc (NASDAQ:SQBG), Entercom Communications Corp. (NYSE:ETM), and JinkoSolar Holding Co., Ltd. (NYSE:JKS) to get a better sense of its popularity.
Follow Universal American Corp. (NYSE:UAM)
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We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
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Now, we’re going to go over the key action regarding Universal American Corporation (NYSE:UAM).
How have hedgies been trading Universal American Corporation (NYSE:UAM)?
At the end of the third quarter, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, flat from the previous quarter. Below, you can check out the change in hedge fund sentiment towards UAM over the last 5 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Camber Capital Management, led by Stephen DuBois, holds the most valuable position in Universal American Corporation (NYSE:UAM). According to its latest 13F filing, the fund has a $44.9 million position in the stock, comprising 2% of its 13F portfolio. The second most bullish fund manager is Ric Dillon of Diamond Hill Capital, with a $43.1 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Some other peers that hold long positions encompass James E. Flynn’s Deerfield Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Charles Clough’s Clough Capital Partners. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Judging by the fact that Universal American Corporation (NYSE:UAM) has weathered a decline in interest from hedge fund managers, we can see that there is a sect of hedgies that slashed their positions entirely heading into Q4. It’s worth mentioning that Matthew Hulsizer’s PEAK6 Capital Management dumped the biggest investment of all the investors monitored by Insider Monkey, valued at close to $0.2 million in stock, and Millennium Management, one of the 10 largest hedge funds in the world, was right behind this move, as the fund dumped about $0.2 million worth of shares.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Universal American Corporation (NYSE:UAM) but similarly valued. We will take a look at Sequential Brands Group Inc (NASDAQ:SQBG), Entercom Communications Corp. (NYSE:ETM), JinkoSolar Holding Co., Ltd. (NYSE:JKS), and Matrix Service Co (NASDAQ:MTRX). This group of stocks’ market values are similar to UAM’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SQBG | 11 | 40671 | -1 |
| ETM | 10 | 36117 | 0 |
| JKS | 5 | 12522 | 1 |
| MTRX | 15 | 68397 | 4 |
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $39 million. That figure was $132 million in UAM’s case. Matrix Service Co (NASDAQ:MTRX) is the most popular stock in this table. On the other hand JinkoSolar Holding Co., Ltd. (NYSE:JKS) is the least popular one with only 5 bullish hedge fund positions. Universal American Corporation (NYSE:UAM) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard MTRX might be a better candidate to consider taking a long position in.
Disclosure: none.
