Hedge Funds Are Crazy About UGI Corp (UGI)

At Insider Monkey we follow around 700 of the best-performing investors and even though many of them lost money in the last couple of months (70% of hedge funds lost money in October whereas S&P 500 ETF lost about 7%), the history teaches us that over the long-run they still manage to beat the market, which is why it can be profitable for us to imitate their activity. Of course, even the best money managers can sometimes get it wrong, but following some of their picks gives us a better chance to outperform the crowd than picking a random stock and this is where our research comes in.

UGI Corp (NYSE:UGI) was in 19 hedge funds’ portfolios at the end of September. UGI investors should be aware of an increase in activity from the world’s largest hedge funds in recent months. There were 17 hedge funds in our database with UGI positions at the end of the previous quarter. Our calculations also showed that ugi isn’t among the 30 most popular stocks among hedge funds.

To most traders, hedge funds are viewed as unimportant, outdated financial vehicles of years past. While there are greater than 8,000 funds trading today, Our experts look at the aristocrats of this group, approximately 700 funds. These money managers preside over the majority of the hedge fund industry’s total capital, and by paying attention to their inimitable stock picks, Insider Monkey has revealed numerous investment strategies that have historically outstripped the market. Insider Monkey’s flagship hedge fund strategy outperformed the S&P 500 index by 6 percentage points per annum since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 24% since February 2017 (through December 3rd) even though the market was up nearly 23% during the same period. We just shared a list of 11 short targets in our latest quarterly update.


Cliff Asness of AQR Capital Management

Let’s take a peek at the recent hedge fund action encompassing UGI Corp (NYSE:UGI).

How are hedge funds trading UGI Corp (NYSE:UGI)?

Heading into the fourth quarter of 2018, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 12% from the previous quarter. On the other hand, there were a total of 20 hedge funds with a bullish position in UGI at the beginning of this year. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).

No of Hedge Funds with UGI Positions

More specifically, Renaissance Technologies was the largest shareholder of UGI Corp (NYSE:UGI), with a stake worth $134.3 million reported as of the end of September. Trailing Renaissance Technologies was Diamond Hill Capital, which amassed a stake valued at $128.1 million. AQR Capital Management, GLG Partners, and D E Shaw were also very fond of the stock, giving the stock large weights in their portfolios.

Now, specific money managers have jumped into UGI Corp (NYSE:UGI) headfirst. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the largest position in UGI Corp (NYSE:UGI). Arrowstreet Capital had $4.5 million invested in the company at the end of the quarter. Brandon Haley’s Holocene Advisors also initiated a $0.7 million position during the quarter. The other funds with brand new UGI positions are Andre F. Perold’s HighVista Strategies, Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as UGI Corp (NYSE:UGI) but similarly valued. We will take a look at iShares Nasdaq Biotechnology ETF (NASDAQ:IBB), Cognex Corporation (NASDAQ:CGNX), Newell Brands Inc. (NASDAQ:NWL), and SEI Investments Company (NASDAQ:SEIC). This group of stocks’ market valuations resemble UGI’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
IBB 17 190644 0
CGNX 13 272086 -3
NWL 36 1698839 3
SEIC 24 360985 2
Average 22.5 630639 0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 22.5 hedge funds with bullish positions and the average amount invested in these stocks was $631 million. That figure was $495 million in UGI’s case. Newell Brands Inc. (NASDAQ:NWL) is the most popular stock in this table. On the other hand Cognex Corporation (NASDAQ:CGNX) is the least popular one with only 13 bullish hedge fund positions. UGI Corp (NYSE:UGI) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard NWL might be a better candidate to consider a long position.

Disclosure: None. This article was originally published at Insider Monkey.