UGI Corp (NYSE:UGI) was in 11 hedge funds' portfolio at the end of March. UGI investors should be aware of a decrease in support from the world's most elite money managers lately. There were 14 hedge funds in our database with UGI holdings at the end of the previous quarter.
To most investors, hedge funds are perceived as unimportant, old financial vehicles of the past. While there are more than 8000 funds with their doors open today, we at Insider Monkey choose to focus on the elite of this club, around 450 funds. Most estimates calculate that this group has its hands on the lion's share of the smart money's total asset base, and by monitoring their best investments, we have brought to light a few investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Just as important, optimistic insider trading sentiment is a second way to parse down the marketplace. Obviously, there are plenty of motivations for an executive to downsize shares of his or her company, but only one, very simple reason why they would initiate a purchase. Plenty of academic studies have demonstrated the impressive potential of this strategy if "monkeys" understand where to look (learn more here).
Now, it's important to take a look at the recent action regarding UGI Corp (NYSE:UGI).
At the end of the first quarter, a total of 11 of the hedge funds we track were bullish in this stock, a change of -21% from the first quarter. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of notable hedge fund managers who were boosting their stakes significantly.
When looking at the hedgies we track, Adage Capital Management, managed by Phill Gross and Robert Atchinson, holds the most valuable position in UGI Corp (NYSE:UGI). Adage Capital Management has a $42.2 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Royce & Associates, managed by Chuck Royce, which held a $26.8 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Ric Dillon's Diamond Hill Capital, Cliff Asness's AQR Capital Management and Israel Englander's Millennium Management.
Due to the fact that UGI Corp (NYSE:UGI) has experienced bearish sentiment from hedge fund managers, it's safe to say that there was a specific group of fund managers that decided to sell off their entire stakes at the end of the first quarter. Intriguingly, Clint Carlson's Carlson Capital dumped the largest position of all the hedgies we monitor, comprising an estimated $27.3 million in stock.. Jim Simons's fund, Renaissance Technologies, also cut its stock, about $10.6 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 3 funds at the end of the first quarter.
Insider buying is best served when the company in question has seen transactions within the past six months. Over the latest six-month time period, UGI Corp (NYSE:UGI) has experienced 3 unique insiders buying, and 4 insider sales (see the details of insider trades here).
With the returns demonstrated by Insider Monkey's studies, retail investors must always watch hedge fund and insider trading activity, and UGI Corp (NYSE:UGI) applies perfectly to this mantra.