Universal Forest Products, Inc. (UFPI): Insiders Aren’t Crazy About It

Is Universal Forest Products, Inc. (NASDAQ:UFPI) a splendid investment right now? Investors who are in the know are in a bearish mood. The number of bullish hedge fund positions retreated by 3 in recent months.

According to most investors, hedge funds are assumed to be worthless, outdated financial vehicles of the past. While there are greater than 8000 funds with their doors open at present, we at Insider Monkey hone in on the crème de la crème of this club, close to 450 funds. It is estimated that this group has its hands on most of the hedge fund industry’s total capital, and by keeping an eye on their highest performing equity investments, we have revealed a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Equally as integral, positive insider trading activity is another way to break down the investments you’re interested in. As the old adage goes: there are lots of motivations for a bullish insider to get rid of shares of his or her company, but just one, very obvious reason why they would behave bullishly. Plenty of empirical studies have demonstrated the useful potential of this method if shareholders know where to look (learn more here).

Keeping this in mind, we’re going to take a gander at the key action encompassing Universal Forest Products, Inc. (NASDAQ:UFPI).

What have hedge funds been doing with Universal Forest Products, Inc. (NASDAQ:UFPI)?

At Q1’s end, a total of 5 of the hedge funds we track were bullish in this stock, a change of -38% from the previous quarter. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were upping their holdings considerably.

According to our comprehensive database, Matthew Hulsizer’s PEAK6 Capital Management had the most valuable call position in Universal Forest Products, Inc. (NASDAQ:UFPI), worth close to $0.9 million, accounting for less than 0.1%% of its total 13F portfolio. On PEAK6 Capital Management’s heels is AQR Capital Management, managed by Cliff Asness, which held a $0.6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedgies that hold long positions include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners and Bill Miller’s Legg Mason Capital Management.

Judging by the fact that Universal Forest Products, Inc. (NASDAQ:UFPI) has experienced bearish sentiment from the smart money, it’s safe to say that there were a few hedge funds that elected to cut their full holdings at the end of the first quarter. It’s worth mentioning that Paul Tudor Jones’s Tudor Investment Corp dropped the largest stake of the 450+ funds we key on, valued at an estimated $0.4 million in stock.. Jeffrey Gendell’s fund, Tontine Asset Management, also dropped its stock, about $0.4 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 3 funds at the end of the first quarter.

What have insiders been doing with Universal Forest Products, Inc. (NASDAQ:UFPI)?

Insider buying is best served when the company in focus has seen transactions within the past 180 days. Over the latest six-month time period, Universal Forest Products, Inc. (NASDAQ:UFPI) has experienced zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Universal Forest Products, Inc. (NASDAQ:UFPI). These stocks are AAON, Inc. (NASDAQ:AAON), Griffon Corporation (NYSE:GFF), Trex Company, Inc. (NYSE:TREX), Apogee Enterprises, Inc. (NASDAQ:APOG), and Headwaters Inc (NYSE:HW). This group of stocks belong to the general building materials industry and their market caps are closest to UFPI’s market cap.

With the returns demonstrated by Insider Monkey’s time-tested strategies, everyday investors should always watch hedge fund and insider trading sentiment, and Universal Forest Products, Inc. (NASDAQ:UFPI) is an important part of this process.

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