We are still in an overall bull market and many stocks that smart money investors were piling into surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Hedge funds’ top 3 stock picks returned 41.7% this year and beat the S&P 500 ETFs by 14 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Univest Financial Corporation (NASDAQ:UVSP).
Univest Financial Corporation (NASDAQ:UVSP) was in 10 hedge funds’ portfolios at the end of September. UVSP investors should be aware of an increase in enthusiasm from smart money in recent months. There were 9 hedge funds in our database with UVSP positions at the end of the previous quarter. Our calculations also showed that UVSP isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most market participants, hedge funds are perceived as underperforming, outdated investment tools of the past. While there are greater than 8000 funds in operation today, Our experts choose to focus on the moguls of this group, about 750 funds. These hedge fund managers handle the lion’s share of the smart money’s total asset base, and by tailing their top picks, Insider Monkey has formulated a number of investment strategies that have historically outperformed the broader indices. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points per annum since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
David Harding of Winton Capital Management
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to view the fresh hedge fund action regarding Univest Financial Corporation (NASDAQ:UVSP).
What have hedge funds been doing with Univest Financial Corporation (NASDAQ:UVSP)?
At Q3’s end, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in UVSP over the last 17 quarters. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Univest Financial Corporation (NASDAQ:UVSP), which was worth $30.4 million at the end of the third quarter. On the second spot was Impax Asset Management which amassed $8.4 million worth of shares. Arrowstreet Capital, D E Shaw, and Two Sigma Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Algert Coldiron Investors allocated the biggest weight to Univest Financial Corporation (NASDAQ:UVSP), around 0.18% of its 13F portfolio. Impax Asset Management is also relatively very bullish on the stock, setting aside 0.11 percent of its 13F equity portfolio to UVSP.
With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Winton Capital Management, managed by David Harding, established the largest position in Univest Financial Corporation (NASDAQ:UVSP). Winton Capital Management had $1.6 million invested in the company at the end of the quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Univest Financial Corporation (NASDAQ:UVSP) but similarly valued. We will take a look at CIRCOR International, Inc. (NYSE:CIR), Ameresco Inc (NYSE:AMRC), Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM), and Garrett Motion Inc. (NYSE:GTX). All of these stocks’ market caps are similar to UVSP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CIR | 13 | 132391 | 3 |
| AMRC | 6 | 33172 | 1 |
| RYTM | 8 | 200857 | -2 |
| GTX | 27 | 207710 | 4 |
| Average | 13.5 | 143533 | 1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.5 hedge funds with bullish positions and the average amount invested in these stocks was $144 million. That figure was $50 million in UVSP’s case. Garrett Motion Inc. (NYSE:GTX) is the most popular stock in this table. On the other hand Ameresco Inc (NYSE:AMRC) is the least popular one with only 6 bullish hedge fund positions. Univest Financial Corporation (NASDAQ:UVSP) 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 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately UVSP wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); UVSP investors were disappointed as the stock returned 2.4% during the first two months of the fourth quarter 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 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
