Is Ultrapar Participacoes SA (ADR) (UGP) A Good Stock To Buy?

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As aggregate interest increased, key hedge funds have been driving this bullishness. Millennium Management assembled the largest position in Ultrapar Participacoes SA (ADR) (NYSE:UGP). Millennium Management had $3.5 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0.6 million investment in the stock during the quarter. The other funds with new positions in the stock are John Overdeck and David Siegel’s Two Sigma Advisors, Matthew Hulsizer’s PEAK6 Capital Management, and Louis Navellier’s Navellier & Associates.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Ultrapar Participacoes SA (ADR) (NYSE:UGP) but similarly valued. These stocks are Kimco Realty Corp (NYSE:KIM), Best Buy Co., Inc. (NYSE:BBY), Fastenal Company (NASDAQ:FAST), and Cabot Oil & Gas Corporation (NYSE:COG). This group of stocks’ market valuations match UGP’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
KIM 11 58251 4
BBY 40 792943 11
FAST 23 624673 -1
COG 35 1797666 -1

As you can see these stocks had an average of 27 hedge funds with bullish positions and the average amount invested in these stocks was $818 million. That figure was $87 million in UGP’s case. Best Buy Co., Inc. (NYSE:BBY) is the most popular stock in this table. On the other hand Kimco Realty Corp (NYSE:KIM) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Ultrapar Participacoes SA (ADR) (NYSE:UGP) is even less popular than KIM. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, 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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Disclosure: None




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