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United Insurance Holdings Corp (UIHC): 50% Jump in Hedge Fund Ownership; What Have They Uncovered?

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We have been waiting for this for a year and finally the third quarter ended up showing a nice bump in the performance of small-cap stocks. Both the S&P 500 and Russell 2000 were up since the end of the second quarter, but small-cap stocks outperformed the large-cap stocks by double digits. This is important for hedge funds, which are big supporters of small-cap stocks, because their investors started pulling some of their capital out due to poor recent performance. It is very likely that equity hedge funds will deliver better risk adjusted returns in the second half of this year. In this article we are going to look at how this recent market trend affected the sentiment of hedge funds towards United Insurance Holdings Corp (NASDAQ:UIHC), and what that likely means for the prospects of the company and its stock.

United Insurance Holdings Corp (NASDAQ:UIHC) was in 15 hedge funds’ portfolios at the end of September. UIHC has experienced an increase in activity from the world’s largest hedge funds recently. There were 10 hedge funds in our database with UIHC holdings at the end of the previous quarter. At the end of this article we will also compare UIHC to other stocks including Agenus Inc (NASDAQ:AGEN), Golden Ocean Group Ltd (NASDAQ:GOGL), and Neuroderm Ltd (NASDAQ:NDRM) to get a better sense of its popularity.

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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

nito/Shutterstock.com

nito/Shutterstock.com

How are hedge funds trading United Insurance Holdings Corp (NASDAQ:UIHC)?

At Q3’s end, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 50% jump from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards UIHC over the last 5 quarters, which shows a nearly 100% jump in the number of positions this year. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

HedgeFundSentimentChart

Of the funds tracked by Insider Monkey, Thomas E. Claugus’ GMT Capital has the biggest position in United Insurance Holdings Corp (NASDAQ:UIHC), worth close to $13.5 million. Coming in second is Weatherbie Capital, led by Matthew A. Weatherbie, which holds a $6.6 million position. Some other members of the smart money that hold long positions consist of Jim Simons’ Renaissance Technologies, Robert B. Gillam’s McKinley Capital Management, and Bernard Horn’s Polaris Capital Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

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