Is Uranium Energy Corp. (NYSEMKT:UEC) a good stock to buy, especially now that the firm has revealed that it will be included in the Russell 3000 Index and Russell Global Index? According to the energy company, it will be added to the aforementioned indexes at the conclusion of the annual reconstitution of the indexes on June 26. Today, the stock is currently up nearly 12% on the NYSE MKT for small-cap companies. After Uranium Energy Corp. (NYSEMKT:UEC) is included in the Russell 3000 Index and Russell Global Index, a membership which lasts for at least a year, the company will also be included in the small-cap Russell 2000 Index. The inclusion in the Russell 3000 Index may make Uranium Energy Corp. (NYSEMKT:UEC) proud, but what moves have the hedge funds tracked by Insider Monkey made regarding the company in the most recent quarter, and what can that tell us about the viability of the stock? Furthermore, how have insiders been trading the company’s shares recently?
We follow hedge funds because our research has shown that their stock picks historically managed to generate alpha even though the filings are up to 45-days delayed. We used a 60-day delay in our back tests to be on the safe side and our research showed that the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Total Return Index by an average of 95 basis points per month between 1999 and 2012. After adjusting for risk, our calculations revealed that these stocks’ monthly alpha was 80 basis points. We have also been sharing and tracking the performance of these stocks since the end of August 2012, during which time they have returned 142%, outperforming the S&P 500 ETF by nearly 84 percentage points (see more details here).
When it comes to insider sentiment, the company’s insiders are upbeat about Uranium Energy Corp. (NYSEMKT:UEC), as evidenced by no sales being recorded in the first and second quarters of 2015. There were, however, several purchases made by insiders of the company. Chief Financial Officer Mark Katsumata was the most recent buyer of shares, snapping up 1,800 and 200 shares respectively in two transactions made on Friday, June 19. Also last Friday, President and CEO Amir Adnani purchased a total of 25,000 shares across three transactions. On May 26 and June 17, Executive Vice President Scott Melbye bought 3,000 and 2,500 shares respectively. At the start of May, Vice President of Resource Development William Andrew Kurrus III bought 3,000 shares of the company. Also in May, Vice President of Land Leonard Garcia beefed up his holdings in the company to the tune of 2,000 shares.
With this in mind, let’s look at how hedge funds have been trading Uranium Energy Corp. (NYSEMKT:UEC) recently.
Hedge fund activity in Uranium Energy Corp. (NYSEAMEX:UEC)
At the end of the initial quarter of 2015, a total of five of the hedge funds tracked by Insider Monkey were long in this stock, unchanged from the previous quarter.
When looking at the hedgies followed by Insider Monkey, Michael Hintze‘s CQS Cayman LP had the biggest position in Uranium Energy Corp. (NYSEMKT:UEC), worth close to $1.1 million, accounting for 0.1% of its total 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $100,000 position, a miniscule amount in its giant 13F portfolio. Some other hedge funds that hold long positions include Israel Englander’s Millennium Management, and D. E Shaw’s D.E. Shaw.
It should also be noted that the total value of holdings in Uranium Energy Corp. among the hedge funds Insider Monkey tracks decreased from about $2.08 million in the final quarter of 2014 to about $1.28 million in the first quarter of this year. That is a significant decrease in hedge fund holdings of about 40%, which far outstrips the 10% dip in share prices during the first quarter. Because of this, even considering numerous bullish insider purchases in the company, we would not recommend buying into Uranium Energy Corp. (NYSEMKT:UEC) at this time.
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