Here is What Hedge Funds Think About United Community Financial Corp (UCFC)

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: D E Shaw. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically, a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case here because only one of the 700+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Citadel Investment Group).

Let’s now take a look at hedge fund activity in other stocks similar to United Community Financial Corp (NASDAQ:UCFC). These stocks are Tuesday Morning Corporation (NASDAQ:TUES), Synta Pharmaceuticals Corp. (NASDAQ:SNTA), Casella Waste Systems Inc. (NASDAQ:CWST), and KEYW Holding Corp. (NASDAQ:KEYW). This group of stocks’ market valuations resemble United Community Financial Corp (NASDAQ:UCFC)’s market valuation.

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 $27 million. That figure was $23 million in United Community Financial Corp (NASDAQ:UCFC)’s case. Casella Waste Systems Inc. (NASDAQ:CWST) is the most popular stock in this table. On the other hand, Synta Pharmaceuticals Corp. (NASDAQ:SNTA) is the least popular one with only 7 bullish hedge fund positions. United Community Financial Corp (NASDAQ:UCFC) 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, Casella Waste Systems Inc. (NASDAQ:CWST) might be a better candidate to consider a long position.