Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those successful funds in these small-cap stocks. In the following paragraphs, we analyze United Financial Bancorp Inc (NASDAQ:UBNK) from the perspective of those successful funds.
Is United Financial Bancorp Inc (NASDAQ:UBNK) the right pick for your portfolio? Hedge funds are indeed turning bullish. The number of bullish hedge fund positions went up by 2 in recent months. There were 13 hedge funds in our database with UBNK holdings at the end of the third quarter. At the end of this article we will also compare UBNK to other stocks including Penntex Midstream Partners LP (NASDAQ:PTXP), InvenSense Inc (NYSE:INVN), and Global Eagle Acquisition Corp (NASDAQ:ENT) to get a better sense of its popularity.
Follow United Financial Bancorp Inc. (NASDAQ:UBNK)
Follow United Financial Bancorp Inc. (NASDAQ:UBNK)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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With all of this in mind, let’s analyze the latest action encompassing United Financial Bancorp Inc (NASDAQ:UBNK).
Hedge fund activity in United Financial Bancorp Inc (NASDAQ:UBNK)
At Q3’s end, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a jump of 18% from the previous quarter. On the other hand, there were a total of 9 hedge funds with a bullish position in UBNK at the beginning of this year. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Jim Simons’ Renaissance Technologies has the number one position in United Financial Bancorp Inc (NASDAQ:UBNK), worth close to $16.7 million, corresponding to less than 0.1% of its total 13F portfolio. Coming in second is Castine Capital Management, led by Paul Magidson, Jonathan Cohen and Ostrom Enders, which holds a $4.8 million position; the fund has 2.4% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish encompass Israel Englander’s Millennium Management, Amy Minella’s Cardinal Capital and Paul Hondros’s AlphaOne 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.
As one would reasonably expect, some big names have been driving this bullishness. Castine Capital Management, led by Paul Magidson, Jonathan Cohen. And Ostrom Enders, initiated the largest position in United Financial Bancorp Inc (NASDAQ:UBNK). Paul Hondros’s AlphaOne Capital Partners also made a $1.1 million investment in the stock during the quarter. The only other fund with a new position in the stock is Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Let’s go over hedge fund activity in other stocks similar to United Financial Bancorp Inc (NASDAQ:UBNK). We will take a look at Penntex Midstream Partners LP (NASDAQ:PTXP), InvenSense Inc (NYSE:INVN), Global Eagle Acquisition Corp (NASDAQ:ENT), and Costamare Inc (NYSE:CMRE). All of these stocks’ market caps match UBNK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PTXP | 4 | 54104 | 0 |
| INVN | 15 | 23195 | 1 |
| ENT | 11 | 308827 | -2 |
| CMRE | 11 | 22129 | 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 $102 million. That figure was $31 million in UBNK’s case. InvenSense Inc (NYSE:INVN) is the most popular stock in this table. On the other hand Penntex Midstream Partners LP (NASDAQ:PTXP) is the least popular one with only 4 bullish hedge fund positions. United Financial Bancorp Inc (NASDAQ:UBNK) 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 INVN might be a better candidate to consider taking a long position in.
Disclosure: none.
