Hedge Funds Have Never Been This Bullish On Universal Technical Institute, Inc. (UTI)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of Universal Technical Institute, Inc. (NYSE:UTI).

Is Universal Technical Institute, Inc. (NYSE:UTI) an exceptional stock to buy now? Money managers are taking an optimistic view. The number of bullish hedge fund bets increased by 4 lately. Our calculations also showed that UTI 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.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (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 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Richard Driehaus of Driehaus Capital

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, blockchain technology’s influence will go beyond online payments. So, we are checking out this futurist’s moonshot opportunities in tech stocks. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to take a gander at the fresh hedge fund action surrounding Universal Technical Institute, Inc. (NYSE:UTI).

How have hedgies been trading Universal Technical Institute, Inc. (NYSE:UTI)?

At Q1’s end, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 36% from one quarter earlier. On the other hand, there were a total of 8 hedge funds with a bullish position in UTI a year ago. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Park West Asset Management, managed by Peter S. Park, holds the number one position in Universal Technical Institute, Inc. (NYSE:UTI). Park West Asset Management has a $19.2 million position in the stock, comprising 1.3% of its 13F portfolio. The second most bullish fund manager is Renaissance Technologies, which holds a $11.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers with similar optimism consist of Chuck Royce’s Royce & Associates, Mark Broach’s Manatuck Hill Partners and Richard Driehaus’s Driehaus Capital. In terms of the portfolio weights assigned to each position Manatuck Hill Partners allocated the biggest weight to Universal Technical Institute, Inc. (NYSE:UTI), around 4.04% of its 13F portfolio. Gratia Capital is also relatively very bullish on the stock, designating 2.28 percent of its 13F equity portfolio to UTI.

As one would reasonably expect, key hedge funds have jumped into Universal Technical Institute, Inc. (NYSE:UTI) headfirst. Driehaus Capital, managed by Richard Driehaus, established the largest position in Universal Technical Institute, Inc. (NYSE:UTI). Driehaus Capital had $4.1 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $1.2 million investment in the stock during the quarter. The other funds with brand new UTI positions are Paul Marshall and Ian Wace’s Marshall Wace LLP, Steve Pei’s Gratia Capital, and Greg Eisner’s Engineers Gate Manager.

Let’s now take a look at hedge fund activity in other stocks similar to Universal Technical Institute, Inc. (NYSE:UTI). These stocks are BioLife Solutions, Inc. (NASDAQ:BLFS), Titan Machinery Inc. (NASDAQ:TITN), Radiant Logistics, Inc. (NYSE:RLGT), and Protagonist Therapeutics, Inc. (NASDAQ:PTGX). This group of stocks’ market valuations are closest to UTI’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BLFS 9 43065 -4
TITN 8 10682 1
RLGT 11 7323 -2
PTGX 15 48172 -2
Average 10.75 27311 -1.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $27 million. That figure was $52 million in UTI’s case. Protagonist Therapeutics, Inc. (NASDAQ:PTGX) is the most popular stock in this table. On the other hand Titan Machinery Inc. (NASDAQ:TITN) is the least popular one with only 8 bullish hedge fund positions. Universal Technical Institute, Inc. (NYSE:UTI) is not the most popular stock in this group but hedge fund interest is still above 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 13.3% in 2020 through June 25th but still beat the market by 16.8 percentage points. Hedge funds were also right about betting on UTI, though not to the same extent, as the stock returned 21.7% during the first two months and twenty five days of the second quarter and outperformed the market as well.

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