Is Ur-Energy Inc. (URG) Going to Burn These Hedge Funds?

Is Ur-Energy Inc. (NYSE:URG) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.

Ur-Energy Inc. (NYSE:URG) investors should pay attention to an increase in activity from the world’s largest hedge funds of late. Ur-Energy Inc. (NYSE:URG) was in 3 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 4. There were 2 hedge funds in our database with URG positions at the end of the second quarter. Our calculations also showed that URG 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.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Michael Hintze CQS Capital

Michael Hintze of CQS Cayman LP

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 10 most profitable companies in the world 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 analyze the key hedge fund action surrounding Ur-Energy Inc. (NYSE:URG).

What have hedge funds been doing with Ur-Energy Inc. (NYSE:URG)?

At the end of the third quarter, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 50% from the previous quarter. By comparison, 1 hedge funds held shares or bullish call options in URG a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

The largest stake in Ur-Energy Inc. (NYSE:URG) was held by CQS Cayman LP, which reported holding $2.5 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $0.1 million position. The only other hedge fund that is bullish on the company was Citadel Investment Group.

As aggregate interest increased, some big names have been driving this bullishness. Renaissance Technologies, founded by Jim Simons, initiated the most valuable position in Ur-Energy Inc. (NYSE:URG). Renaissance Technologies had $0.1 million invested in the company at the end of the quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Ur-Energy Inc. (NYSE:URG). These stocks are Beam Global (NASDAQ:BEEM), The Alkaline Water Company Inc. (NASDAQ:WTER), Enlivex Therapeutics Ltd. (NASDAQ:ENLV), Corenergy Infrastructure Trust Inc (NYSE:CORR), DiaMedica Therapeutics Inc. (NASDAQ:DMAC), CF Bankshares Inc. (NASDAQ:CFBK), and Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV). This group of stocks’ market values match URG’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BEEM 5 8317 2
WTER 3 2527 1
ENLV 1 1773 -2
CORR 6 6885 -3
DMAC 10 22656 4
CFBK 1 3248 0
HOFV 3 457 3
Average 4.1 6552 0.7

View table here if you experience formatting issues.

As you can see these stocks had an average of 4.1 hedge funds with bullish positions and the average amount invested in these stocks was $7 million. That figure was $3 million in URG’s case. DiaMedica Therapeutics Inc. (NASDAQ:DMAC) is the most popular stock in this table. On the other hand Enlivex Therapeutics Ltd. (NASDAQ:ENLV) is the least popular one with only 1 bullish hedge fund positions. Ur-Energy Inc. (NYSE:URG) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for URG is 39.6. 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 gained 28.1% in 2020 through November 23rd and still beat the market by 15.4 percentage points. A small number of hedge funds were also right about betting on URG as the stock returned 10.4% since the end of the third quarter (through 11/23) and outperformed the market by an even larger margin.

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