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Is CVR Partners LP (UAN) A Good Stock To Buy?

Insider Monkey finished processing more than 700 13F filings made by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th. In this article we are going to take a look at smart money sentiment towards CVR Partners LP (NYSE:UAN).

CVR Partners LP (NYSE:UAN) investors should be aware of a decrease in activity from the world’s largest hedge funds lately. At the end of this article, we will also compare CVR Partners LP (NYSE:UAN) to other stocks including Sierra Wireless, Inc. (USA) (NASDAQ:SWIR), Cynosure, Inc. (NASDAQ:CYNO), and Affymetrix, Inc. (NASDAQ:AFFX) to get a better sense of its popularity.

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Today there are dozens of formulas investors can use to evaluate stocks. Some of the best formulas are hedge fund and insider trading activity. we have shown that, historically, those who follow the top picks of the elite fund managers can trounce the broader indices by a solid amount (see the details here).

Keeping this in mind, we’re going to take a gander at the key action regarding CVR Partners LP (NYSE:UAN).

What have hedge funds been doing with CVR Partners LP (NYSE:UAN)?

At the end of the third quarter, a total of 5 of the hedge funds tracked by Insider Monkey were bullish in this stock, flat over the second quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Renaissance Technologies had the most valuable position in CVR Partners LP (NYSE:UAN), worth close to $1.2 million, accounting for less than 0.1% of its total 13F portfolio. Coming in second is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $0.5 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Some other peers that are bullish contain Ken Griffin’s Citadel Investment Group, Matthew Hulsizer’s PEAK6 Capital Management and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.

Due to the fact that CVR Partners LP (NYSE:UAN) has experienced bearish sentiment from hedge fund managers, it’s easy to see that there were a few hedgies that elected to cut their entire stakes heading into Q4. Intriguingly, Jeff Buick’s Trishield Capital Management cut the biggest stake of all the hedgies tracked by Insider Monkey, valued at an estimated $1 million in stock. Citadel Investment Group also sold off its stock, about $9,000 worth. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as CVR Partners LP (NYSE:UAN) but similarly valued. We will take a look at Sierra Wireless, Inc. (USA) (NASDAQ:SWIR), Cynosure, Inc. (NASDAQ:CYNO), Affymetrix, Inc. (NASDAQ:AFFX), and Yadkin Financial Corp (NASDAQ:YDKN). This group of stocks’ market values are closest to CVR Partners LP (NYSE:UAN)’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SWIR 9 17904 0
CYNO 18 77202 3
AFFX 24 139583 2
YDKN 10 88756 0

As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $81 million.That figure was $2 millions in CVR Partners LP (NYSE:UAN)’s case. Affymetrix, Inc. (NASDAQ:AFFX) is the most popular stock in this table. On the other hand, Sierra Wireless, Inc. (USA) (NASDAQ:SWIR) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks CVR Partners LP (NYSE:UAN) is even less popular than Sierra Wireless, Inc. (USA) (NASDAQ:SWIR). Considering that hedge funds aren’t fond of this stock, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

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