In this article we will check out the progression of hedge fund sentiment towards Upland Software Inc (NASDAQ:UPLD) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Hedge fund interest in Upland Software Inc (NASDAQ:UPLD) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that UPLD isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). At the end of this article we will also compare UPLD to other stocks including BellRing Brands, Inc. (NYSE:BRBR), Arcos Dorados Holding Inc (NYSE:ARCO), and AlloVir, Inc. (NASDAQ:ALVR) to get a better sense of its popularity.
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Philip Hempleman of Ardsley Partners
Keeping this in mind let’s review the new hedge fund action encompassing Upland Software Inc (NASDAQ:UPLD).
Do Hedge Funds Think UPLD Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the first quarter of 2020. By comparison, 16 hedge funds held shares or bullish call options in UPLD a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Royce & Associates was the largest shareholder of Upland Software Inc (NASDAQ:UPLD), with a stake worth $84.2 million reported as of the end of June. Trailing Royce & Associates was P2 Capital Partners, which amassed a stake valued at $52.5 million. Ardsley Partners, Dorset Management, and G2 Investment Partners 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 Dorset Management allocated the biggest weight to Upland Software Inc (NASDAQ:UPLD), around 4.39% of its 13F portfolio. General Equity Partners is also relatively very bullish on the stock, dishing out 4.1 percent of its 13F equity portfolio to UPLD.
Because Upland Software Inc (NASDAQ:UPLD) has faced a decline in interest from the smart money, we can see that there exists a select few hedgies who sold off their full holdings last quarter. Intriguingly, George McCabe’s Portolan Capital Management dropped the biggest investment of the “upper crust” of funds followed by Insider Monkey, valued at close to $8.3 million in stock, and Brandon Osten’s Venator Capital Management was right behind this move, as the fund dumped about $3.8 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks similar to Upland Software Inc (NASDAQ:UPLD). We will take a look at BellRing Brands, Inc. (NYSE:BRBR), Arcos Dorados Holding Inc (NYSE:ARCO), AlloVir, Inc. (NASDAQ:ALVR), ChipMOS Technologies Inc (NASDAQ:IMOS), Stoke Therapeutics, Inc. (NASDAQ:STOK), New Gold Inc. (NYSE:NGD), and S & T Bancorp Inc (NASDAQ:STBA). This group of stocks’ market values match UPLD’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BRBR | 16 | 239746 | 2 |
| ARCO | 10 | 40185 | -2 |
| ALVR | 10 | 95392 | 1 |
| IMOS | 2 | 55191 | -1 |
| STOK | 14 | 181850 | -1 |
| NGD | 13 | 69436 | -1 |
| STBA | 3 | 1370 | 1 |
| Average | 9.7 | 97596 | -0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.7 hedge funds with bullish positions and the average amount invested in these stocks was $98 million. That figure was $222 million in UPLD’s case. BellRing Brands, Inc. (NYSE:BRBR) is the most popular stock in this table. On the other hand ChipMOS Technologies Inc (NASDAQ:IMOS) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Upland Software Inc (NASDAQ:UPLD) is more popular among hedge funds. Our overall hedge fund sentiment score for UPLD is 75.4. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Unfortunately UPLD wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on UPLD were disappointed as the stock returned -18.6% since the end of the second quarter (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
