Union Bankshares Corp (UBSH): Are Hedge Funds Right About This Stock?

You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.

Is Union Bankshares Corp (NASDAQ:UBSH) a superb stock to buy now? Investors who are in the know are actually selling. The number of bullish hedge fund bets that are revealed through the 13F filings slashed by 1 recently. UBSH was in 13 hedge funds’ portfolios at the end of September. There were 14 hedge funds in our database with UBSH positions at the end of the previous quarter. At the end of this article we will also compare UBSH to other stocks including Abaxis Inc (NASDAQ:ABAX), Coherus Biosciences Inc (NASDAQ:CHRS), and Brookfield Business Partners L.P. Limited Partnership Units(NYSE:BBU) to get a better sense of its popularity.

We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.

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Now, we’re going to take a gander at the new action regarding Union Bankshares Corp (NASDAQ:UBSH).

What does the smart money think about Union Bankshares Corp (NASDAQ:UBSH)?

At Q3’s end, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a decline of 7% from one quarter earlier. On the other hand, there were a total of 6 hedge funds with a bullish position in UBSH at the beginning of this year. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Jim Simons’s Renaissance Technologies has the largest position in Union Bankshares Corp (NASDAQ:UBSH), worth close to $17.5 million, comprising less than 0.1% of its total 13F portfolio. Coming in second is Israel Englander’s Millennium Management holding an $11.5 million position; less than 0.1% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors that hold long positions contain Cliff Asness’s AQR Capital Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and D. E. Shaw’s D E Shaw. 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.

We already know that not all hedge funds are bullish on the stock and some hedge funds actually cut their positions entirely. Interestingly, Fred Cummings’s Elizabeth Park Capital Management cut the largest investment of all the investors watched by Insider Monkey, totaling close to $5.4 million in stock, and Anton Schutz’s Mendon Capital Advisors was right behind this move, as the fund dropped about $1.9 million worth of Union Bankshares Corp (NASDAQ:UBSH) shares.

Let’s check out hedge fund activity in other stocks similar to Union Bankshares Corp (NASDAQ:UBSH). We will take a look at Abaxis Inc (NASDAQ:ABAX), Coherus Biosciences Inc (NASDAQ:CHRS), Brookfield Business Partners L.P. Limited Partnership Units (NYSE:BBU), and Engility Holdings Inc (NYSE:EGL). All of these stocks’ market caps are similar to UBSH’s market cap.

As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $51 million. That figure was $41 million in UBSH’s case. Coherus Biosciences Inc (NASDAQ:CHRS) is the most popular stock in this table. On the other hand Brookfield Business Partners L.P. Limited Partnership Units (NYSE:BBU) is the least popular one with only 4 bullish hedge fund positions. Union Bankshares Corp (NASDAQ:UBSH) 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 CHRS might be a better candidate to consider taking a long position in.

Disclosure: none.