Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of UGI Corp (NYSE:UGI).
UGI Corp (NYSE:UGI) was in 27 hedge funds’ portfolios at the end of March. UGI shareholders have witnessed an increase in hedge fund interest recently. There were 23 hedge funds in our database with UGI holdings at the end of the previous quarter. Our calculations also showed that UGI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most traders, hedge funds are assumed to be worthless, old investment tools of years past. While there are over 8000 funds trading at the moment, Our researchers hone in on the crème de la crème of this club, around 850 funds. These money managers oversee bulk of the smart money’s total asset base, and by shadowing their finest stock picks, Insider Monkey has formulated many investment strategies that have historically surpassed the broader indices. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Ric Dillon of Diamond Hill Capital
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s analyze the fresh hedge fund action encompassing UGI Corp (NYSE:UGI).
Hedge fund activity in UGI Corp (NYSE:UGI)
Heading into the second quarter of 2020, a total of 27 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 17% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in UGI over the last 18 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in UGI Corp (NYSE:UGI) was held by Diamond Hill Capital, which reported holding $68 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $63.4 million position. Other investors bullish on the company included Millennium Management, D E Shaw, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Invenomic Capital Management allocated the biggest weight to UGI Corp (NYSE:UGI), around 2.45% of its 13F portfolio. Fondren Management is also relatively very bullish on the stock, setting aside 0.54 percent of its 13F equity portfolio to UGI.
As industrywide interest jumped, some big names were leading the bulls’ herd. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, assembled the biggest position in UGI Corp (NYSE:UGI). Arrowstreet Capital had $6.7 million invested in the company at the end of the quarter. Greg Eisner’s Engineers Gate Manager also made a $5.5 million investment in the stock during the quarter. The following funds were also among the new UGI investors: Dmitry Balyasny’s Balyasny Asset Management, Jinghua Yan’s TwinBeech Capital, and Peter Muller’s PDT Partners.
Let’s go over hedge fund activity in other stocks similar to UGI Corp (NYSE:UGI). These stocks are Genpact Limited (NYSE:G), National Retail Properties, Inc. (NYSE:NNN), Bruker Corporation (NASDAQ:BRKR), and Lumentum Holdings Inc (NASDAQ:LITE). All of these stocks’ market caps are similar to UGI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| G | 34 | 335413 | -3 |
| NNN | 19 | 62007 | -4 |
| BRKR | 21 | 109920 | -4 |
| LITE | 34 | 487864 | -3 |
| Average | 27 | 248801 | -3.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27 hedge funds with bullish positions and the average amount invested in these stocks was $249 million. That figure was $253 million in UGI’s case. Genpact Limited (NYSE:G) is the most popular stock in this table. On the other hand National Retail Properties, Inc. (NYSE:NNN) is the least popular one with only 19 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. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but beat the market by 13.2 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 19.4% during the second quarter and outperformed the market.
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Disclosure: None. This article was originally published at Insider Monkey.
