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

Judging by the fact that UCP Inc (NYSE:UCP) has experienced declining sentiment from hedge fund managers, logic holds that there were a few hedgies who were dropping their entire stakes in the third quarter. Intriguingly, Jim Simons’s Renaissance Technologies cut the biggest stake of the “upper crust” of funds tracked by Insider Monkey, worth close to $0.5 million in stock. Israel Englander’s fund, Millennium Management, also said goodbye to its stock, about $0.1 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now review hedge fund activity in other stocks similar to UCP Inc (NYSE:UCP). These stocks are Hutchinson Technology Incorporated (NASDAQ:HTCH), iCAD Inc (NASDAQ:ICAD), Galectin Therapeutics Inc. (NASDAQ:GALT), and Catalyst Biosciences Inc (NASDAQ:CBIO). This group of stocks’ market caps resemble UCP’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HTCH 6 3601 -2
ICAD 4 2015 -2
GALT 4 1677 -2
CBIO 9 9035 9

As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $4 million, significantly lower compared to the $13 million in UCP’s case. Catalyst Biosciences Inc (NASDAQ:CBIO) is the most popular stock in this table. On the other hand iCAD Inc (NASDAQ:ICAD) is the least popular one with only 4 bullish hedge fund positions. UCP Inc (NYSE:UCP) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard CBIO might be a better candidate to consider a long position.

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