Hedge Funds Are Dumping UGI Corp (UGI)

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is UGI Corp (NYSE:UGI), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

UGI Corp (NYSE:UGI) was in 19 hedge funds’ portfolios at the end of March. The all time high for this statistic is 27. UGI has seen a decrease in hedge fund interest lately. There were 25 hedge funds in our database with UGI holdings at the end of December. Our calculations also showed that UGI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

In today’s marketplace there are a large number of methods market participants can use to assess publicly traded companies. A couple of the most underrated methods are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the best picks of the best investment managers can outclass their index-focused peers by a healthy margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Fred DiSanto Ancora Advisors

Fred DiSanto of Ancora Advisors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind let’s review the new hedge fund action surrounding UGI Corp (NYSE:UGI).

Do Hedge Funds Think UGI Is A Good Stock To Buy Now?

Heading into the second quarter of 2021, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -24% from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in UGI over the last 23 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is UGI A Good Stock To Buy?

According to Insider Monkey’s hedge fund database, Matthew Stadelman’s Diamond Hill Capital has the most valuable position in UGI Corp (NYSE:UGI), worth close to $120.7 million, amounting to 0.5% of its total 13F portfolio. The second largest stake is held by AQR Capital Management, led by Cliff Asness, holding a $26.9 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other members of the smart money that are bullish contain Frederick DiSanto’s Ancora Advisors, Vince Maddi and Shawn Brennan’s SIR Capital Management and Mario Gabelli’s GAMCO Investors. In terms of the portfolio weights assigned to each position SIR Capital Management allocated the biggest weight to UGI Corp (NYSE:UGI), around 1.19% of its 13F portfolio. Invenomic Capital Management is also relatively very bullish on the stock, designating 0.73 percent of its 13F equity portfolio to UGI.

Since UGI Corp (NYSE:UGI) has experienced declining sentiment from the smart money, it’s easy to see that there was a specific group of hedge funds who sold off their positions entirely by the end of the first quarter. At the top of the heap, Renaissance Technologies cut the biggest investment of the 750 funds followed by Insider Monkey, valued at an estimated $10.5 million in stock. Israel Englander’s fund, Millennium Management, also sold off its stock, about $9.3 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 6 funds by the end of the first quarter.

Let’s check out hedge fund activity in other stocks similar to UGI Corp (NYSE:UGI). We will take a look at Vistra Corp. (NYSE:VST), Guidewire Software Inc (NYSE:GWRE), Omega Healthcare Investors Inc (NYSE:OHI), The New York Times Company (NYSE:NYT), Ciena Corporation (NASDAQ:CIEN), US Foods Holding Corp. (NYSE:USFD), and Marathon Oil Corporation (NYSE:MRO). This group of stocks’ market values are closest to UGI’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
VST 46 1254154 7
GWRE 33 1534269 -2
OHI 25 190542 10
NYT 48 2399824 -2
CIEN 27 327611 3
USFD 40 1489049 -4
MRO 29 423870 3
Average 35.4 1088474 2.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 35.4 hedge funds with bullish positions and the average amount invested in these stocks was $1088 million. That figure was $189 million in UGI’s case. The New York Times Company (NYSE:NYT) is the most popular stock in this table. On the other hand Omega Healthcare Investors Inc (NYSE:OHI) is the least popular one with only 25 bullish hedge fund positions. Compared to these stocks UGI Corp (NYSE:UGI) is even less popular than OHI. Our overall hedge fund sentiment score for UGI is 20.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th but managed to beat the market by 7.7 percentage points. A small number of hedge funds were also right about betting on UGI, though not to the same extent, as the stock returned 13.2% since the end of March (through July 16th) and outperformed the market as well.

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