We at Insider Monkey have gone over 738 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article, we look at what those funds think of United Community Financial Corp (NASDAQ:UCFC) based on that data.
Is United Community Financial Corp (NASDAQ:UCFC) a worthy investment today? Investors who are in the know are becoming more confident. The number of long hedge fund positions increased by 3 lately. Our calculations also showed that ucfc isn’t among the 30 most popular stocks among hedge funds. UCFC was in 11 hedge funds’ portfolios at the end of March. There were 8 hedge funds in our database with UCFC positions at the end of the previous quarter.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s take a look at the fresh hedge fund action surrounding United Community Financial Corp (NASDAQ:UCFC).
How have hedgies been trading United Community Financial Corp (NASDAQ:UCFC)?
At the end of the first quarter, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 38% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards UCFC over the last 15 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Jim Simons’s Renaissance Technologies has the largest position in United Community Financial Corp (NASDAQ:UCFC), worth close to $19.4 million, comprising less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Elizabeth Park Capital Management, led by Fred Cummings, holding a $6.6 million position; 2.6% of its 13F portfolio is allocated to the stock. Some other members of the smart money with similar optimism contain Israel Englander’s Millennium Management, John Overdeck and David Siegel’s Two Sigma Advisors and Frederick DiSanto’s Ancora Advisors.
With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Winton Capital Management, managed by David Harding, initiated the most outsized position in United Community Financial Corp (NASDAQ:UCFC). Winton Capital Management had $0.4 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $0.3 million position during the quarter. The other funds with brand new UCFC positions are D. E. Shaw’s D E Shaw and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as United Community Financial Corp (NASDAQ:UCFC) but similarly valued. We will take a look at Tejon Ranch Company (NYSE:TRC), Oxford Immunotec Global PLC (NASDAQ:OXFD), The Bancorp, Inc. (NASDAQ:TBBK), and Equity Bancshares, Inc. (NASDAQ:EQBK). This group of stocks’ market caps resemble UCFC’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.75 hedge funds with bullish positions and the average amount invested in these stocks was $90 million. That figure was $30 million in UCFC’s case. Oxford Immunotec Global PLC (NASDAQ:OXFD) is the most popular stock in this table. On the other hand Equity Bancshares, Inc. (NASDAQ:EQBK) is the least popular one with only 7 bullish hedge fund positions. United Community Financial Corp (NASDAQ:UCFC) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately UCFC wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); UCFC investors were disappointed as the stock returned 1.6% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.