UCP Inc (UCP): Are Hedge Funds Right About This Stock?

Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: UCP Inc (NYSE:UCP).

UCP Inc (NYSE:UCP) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 5 hedge funds’ portfolios at the end of the third quarter of 2015. At the end of this article we will also compare UCP to other stocks including Hutchinson Technology Incorporated (NASDAQ:HTCH), iCAD Inc (NASDAQ:ICAD), and Galectin Therapeutics Inc. (NASDAQ:GALT) to get a better sense of its popularity.

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To most traders, hedge funds are perceived as unimportant, outdated financial tools of yesteryear. While there are greater than an 8000 funds in operation today, Our experts hone in on the upper echelon of this club, approximately 700 funds. These hedge fund managers manage most of the smart money’s total capital, and by paying attention to their top equity investments, Insider Monkey has determined several investment strategies that have historically outrun the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy outrun the S&P 500 index by 12 percentage points annually for a decade in their back tests.

With all of this in mind, let’s take a glance at the key action regarding UCP Inc (NYSE:UCP).

Hedge fund activity in UCP Inc (NYSE:UCP)

At Q3’s end, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the second quarter. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Buckingham Capital Management, managed by David Keidan, holds the largest position in UCP Inc (NYSE:UCP). Buckingham Capital Management has a $6.9 million position in the stock, comprising 0.6% of its 13F portfolio. Coming in second is Central Square Management, managed by Kelly Cardwell, which holds a $3.7 million position; the fund has 3.9% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions comprise Martin Whitman’s Third Avenue Management, David Cohen and Harold Levy’s Iridian Asset Management and Joseph A. Jolson’s Harvest Capital Strategies.