The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on September 30th. We at Insider Monkey have made an extensive database of nearly 750 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Uranium Energy Corp. (NYSE:UEC) based on those filings.
Uranium Energy Corp. (NYSE:UEC) was in 6 hedge funds’ portfolios at the end of the third quarter of 2019. UEC has seen a decrease in support from the world’s most elite money managers of late. There were 11 hedge funds in our database with UEC holdings at the end of the previous quarter. Our calculations also showed that UEC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Michael Hintze of CQS Cayman LP
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. Now let’s take a look at the key hedge fund action encompassing Uranium Energy Corp. (NYSE:UEC).
How are hedge funds trading Uranium Energy Corp. (NYSE:UEC)?
At the end of the third quarter, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -45% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards UEC over the last 17 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Falcon Edge Capital was the largest shareholder of Uranium Energy Corp. (NYSE:UEC), with a stake worth $1.3 million reported as of the end of September. Trailing Falcon Edge Capital was CQS Cayman LP, which amassed a stake valued at $0.7 million. Sprott Asset Management, Citadel Investment Group, and Winton Capital Management 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 Falcon Edge Capital allocated the biggest weight to Uranium Energy Corp. (NYSE:UEC), around 0.25% of its 13F portfolio. Sprott Asset Management is also relatively very bullish on the stock, dishing out 0.1 percent of its 13F equity portfolio to UEC.
Since Uranium Energy Corp. (NYSE:UEC) has faced declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there is a sect of money managers that decided to sell off their positions entirely in the third quarter. At the top of the heap, Michael A. Price and Amos Meron’s Empyrean Capital Partners said goodbye to the biggest position of the “upper crust” of funds monitored by Insider Monkey, valued at close to $1.1 million in stock. Phil Frohlich’s fund, Prescott Group Capital Management, also sold off its stock, about $0.7 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 5 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Uranium Energy Corp. (NYSE:UEC). These stocks are Exela Technologies, Inc. (NASDAQ:XELA), Safe Bulkers, Inc. (NYSE:SB), Peoples Bancorp of North Carolina, Inc. (NASDAQ:PEBK), and Rockwell Medical Inc (NASDAQ:RMTI). All of these stocks’ market caps resemble UEC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| XELA | 7 | 32646 | -2 |
| SB | 7 | 10705 | 2 |
| PEBK | 2 | 16409 | 0 |
| RMTI | 5 | 1021 | -6 |
| Average | 5.25 | 15195 | -1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.25 hedge funds with bullish positions and the average amount invested in these stocks was $15 million. That figure was $3 million in UEC’s case. Exela Technologies, Inc. (NASDAQ:XELA) is the most popular stock in this table. On the other hand Peoples Bancorp of North Carolina, Inc. (NASDAQ:PEBK) is the least popular one with only 2 bullish hedge fund positions. Uranium Energy Corp. (NYSE:UEC) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately UEC wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on UEC were disappointed as the stock returned -9.3% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.
