While the market driven by short-term sentiment influenced by the accommodative interest rate environment in the US, virus news and stimulus talks, many smart money investors are starting to get cautious towards the current bull run since March and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 30,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Upland Software Inc (NASDAQ:UPLD).
Is UPLD a good stock to buy now? Upland Software Inc (NASDAQ:UPLD) was in 22 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 28. UPLD has experienced an increase in hedge fund sentiment in recent months. There were 16 hedge funds in our database with UPLD positions at the end of the second quarter. Our calculations also showed that UPLD isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.
To most traders, hedge funds are seen as underperforming, old investment tools of years past. While there are greater than 8000 funds in operation at present, Our researchers choose to focus on the upper echelon of this group, around 850 funds. These hedge fund managers direct the majority of the smart money’s total capital, and by shadowing their inimitable equity investments, Insider Monkey has revealed a few investment strategies that have historically outpaced Mr. Market. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. With all of this in mind let’s take a peek at the fresh hedge fund action encompassing Upland Software Inc (NASDAQ:UPLD).
Do Hedge Funds Think UPLD Is A Good Stock To Buy Now?
At third quarter’s end, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 38% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in UPLD over the last 21 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
Among these funds, Royce & Associates held the most valuable stake in Upland Software Inc (NASDAQ:UPLD), which was worth $39.7 million at the end of the third quarter. On the second spot was General Equity Partners which amassed $37 million worth of shares. P2 Capital Partners, Whetstone Capital Advisors, and Nantahala Capital Management 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 General Equity Partners allocated the biggest weight to Upland Software Inc (NASDAQ:UPLD), around 20.3% of its 13F portfolio. Dorset Management is also relatively very bullish on the stock, dishing out 8.99 percent of its 13F equity portfolio to UPLD.
Now, some big names have jumped into Upland Software Inc (NASDAQ:UPLD) headfirst. P2 Capital Partners, managed by Claus Moller, initiated the biggest position in Upland Software Inc (NASDAQ:UPLD). P2 Capital Partners had $26.4 million invested in the company at the end of the quarter. Ken Grossman and Glen Schneider’s SG Capital Management also initiated a $2.9 million position during the quarter. The other funds with brand new UPLD positions are Paul Marshall and Ian Wace’s Marshall Wace LLP, Michael Gelband’s ExodusPoint Capital, and Paul Tudor Jones’s Tudor Investment Corp.
Let’s go over hedge fund activity in other stocks similar to Upland Software Inc (NASDAQ:UPLD). These stocks are Surgery Partners, Inc. (NASDAQ:SGRY), Heartland Financial USA Inc (NASDAQ:HTLF), Allegheny Technologies Incorporated (NYSE:ATI), HudBay Minerals Inc (NYSE:HBM), Independence Realty Trust Inc (NYSE:IRT), Harsco Corporation (NYSE:HSC), and Supernus Pharmaceuticals Inc (NASDAQ:SUPN). This group of stocks’ market values resemble UPLD’s market value.
|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 13.1 hedge funds with bullish positions and the average amount invested in these stocks was $117 million. That figure was $252 million in UPLD’s case. Supernus Pharmaceuticals Inc (NASDAQ:SUPN) is the most popular stock in this table. On the other hand Heartland Financial USA Inc (NASDAQ:HTLF) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Upland Software Inc (NASDAQ:UPLD) is more popular among hedge funds. Our overall hedge fund sentiment score for UPLD is 83.6. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks returned 30.7% in 2020 through December 14th but still managed to beat the market by 15.8 percentage points. Hedge funds were also right about betting on UPLD as the stock returned 21.1% since the end of September (through 12/14) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.