Why UniPixel Inc (UNXL)’s Stock Is Deep in Red Today?

UniPixel Inc (NASDAQ:UNXL)’s stock nosedived more than 20% today after the company announced public offering of its newly issued shares. The Santa Clara based electronics company plans to offer 5.35 million shares of its stock at $1.50 a share with the option for its underwriters to purchase up to an additional 802,500 shares. The offering is subject to market conditions.  Roth Capital Partners is the sole book-running manager in this offering, whereas Ladenburg Thalmann and The Benchmark Company are serving as co-managers.

UniPixel Inc (NASDAQ:UNXL) investors should be aware of an increase in hedge fund interest in recent months. At Q1’s end, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from the previous quarter. At the end of this article we will also compare UNXL to other stocks including Rand Logistics, Inc. (NASDAQ:RLOG), Aeropostale, Inc. (NYSE:ARO), and Cinedigm Digital Cinema Corp (NASDAQ:CIDM) to get a better sense of its popularity.

Follow Uni-Pixel (NASDAQ:UNXL)

Today there are numerous signals market participants put to use to value stocks. Some of the less known signals are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the top picks of the best hedge fund managers can trounce the S&P 500 by a superb margin (see the details here).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Hudson Bay Capital Management, managed by Sander Gerber, holds the largest position in UniPixel Inc (NASDAQ:UNXL) and the fund initiated the stake during the first quarter. Hudson Bay Capital Management has a $1.4 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is David E, Shaw‘s D. E. Shaw, which holds a $0.1 million position; less than 0.1% of its 13F portfolio is allocated to the stock.

Let’s now review hedge fund activity in other stocks similar to UniPixel Inc (NASDAQ:UNXL). We will take a look at Rand Logistics, Inc. (NASDAQ:RLOG), Aeropostale, Inc. (NYSE:ARO), Cinedigm Digital Cinema Corp (NASDAQ:CIDM), and Fairway Group Holdings Corp (NASDAQ:FWM). This group of stocks’ market caps are similar to UNXL’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
RLOG 6 1632 3
ARO 6 1380 -2
CIDM 4 579 -2
FWM 5 822 -1

As you can see these stocks had an average of 5.25 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $2 million in UNXL’s case. Rand Logistics, Inc. (NASDAQ:RLOG) is the most popular stock in this table. On the other hand Cinedigm Digital Cinema Corp (NASDAQ:CIDM) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks UniPixel Inc (NASDAQ:UNXL) is even less popular than CIDM. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

Disclosure: None