Hedge Funds Are Dumping UGI Corp (UGI)

We can judge whether UGI Corp (NYSE:UGI) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, research shows that these picks historically outperformed the market when we factor in known risk factors.

UGI Corp (NYSE:UGI) has experienced a decrease in enthusiasm from smart money of late. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article, we will examine companies such as Reinsurance Group of America Inc (NYSE:RGA), Qiagen NV (NASDAQ:QGEN), and Kilroy Realty Corp (NYSE:KRC) to gather more data points.

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In today’s marketplace there are a lot of tools investors can use to appraise publicly traded companies. A pair of the most useful tools are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the best hedge fund managers can trounce the S&P 500 by a significant margin (see the details here).

Now, we’re going to review the latest action surrounding UGI Corp (NYSE:UGI).

What does the smart money think about UGI Corp (NYSE:UGI)?

Heading into Q4, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a decrease of 11% from the second quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Renaissance Technologies holds the biggest position in UGI Corp (NYSE:UGI). Renaissance Technologies has a $69.1 million position in the stock, comprising 0.2% of its 13F portfolio. The second most bullish fund manager is Phill Gross and Robert Atchinson of Adage Capital Management, with a $54.9 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that are bullish include Cliff Asness’ AQR Capital Management, and Chuck Royce’s Royce & Associates.

Seeing as UGI Corp (NYSE:UGI) has experienced a declination in interest from the smart money, we can see that there exists a select few fund managers that decided to sell off their positions entirely in the third quarter. Interestingly, Chao Ku’s Nine Chapters Capital Management cut the biggest stake of the “upper crust” of funds tracked by Insider Monkey, worth close to $5.4 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund sold off about $3 million worth of shares. These moves are important to note, as aggregate hedge fund interest fell by 2 funds in the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to UGI Corp (NYSE:UGI). We will take a look at Reinsurance Group of America Inc (NYSE:RGA), Qiagen NV (NASDAQ:QGEN), Kilroy Realty Corp (NYSE:KRC), and Waste Connections, Inc. (NYSE:WCN). This group of stocks’ market valuations matches UGI Corp (NYSE:UGI)’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
RGA 16 302110 -2
QGEN 14 106937 -6
KRC 8 58664 -2
WCN 23 324310 1

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 $198 million. That figure was $348 million in UGI Corp (NYSE:UGI)’s case. Waste Connections, Inc. (NYSE:WCN) is the most popular stock in this table. On the other hand, Kilroy Realty Corp (NYSE:KRC) is the least popular one with only 8 bullish hedge fund positions. UGI Corp (NYSE:UGI) 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, Waste Connections, Inc. (NYSE:WCN) might be a better candidate to consider a long position.