The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of Upland Software Inc (NASDAQ:UPLD).
Upland Software Inc (NASDAQ:UPLD) investors should pay attention to a decrease in hedge fund sentiment in recent months. UPLD was in 17 hedge funds' portfolios at the end of March. There were 22 hedge funds in our database with UPLD positions at the end of the previous quarter. Our calculations also showed that UPLD isn't among the 30 most popular stocks among hedge funds (click for Q1 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let's take a look at the fresh hedge fund action regarding Upland Software Inc (NASDAQ:UPLD).
How are hedge funds trading Upland Software Inc (NASDAQ:UPLD)?
At Q1's end, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -23% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in UPLD over the last 18 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Portolan Capital Management was the largest shareholder of Upland Software Inc (NASDAQ:UPLD), with a stake worth $26.9 million reported as of the end of September. Trailing Portolan Capital Management was Royce & Associates, which amassed a stake valued at $21.5 million. General Equity Partners, G2 Investment Partners Management, 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 12.58% of its 13F portfolio. Dorset Management is also relatively very bullish on the stock, dishing out 6.99 percent of its 13F equity portfolio to UPLD.
Seeing as Upland Software Inc (NASDAQ:UPLD) has faced falling interest from hedge fund managers, logic holds that there were a few funds that elected to cut their full holdings heading into Q4. Interestingly, William C. Martin's Raging Capital Management dropped the largest position of the 750 funds tracked by Insider Monkey, totaling an estimated $19.4 million in stock. Ben Gordon's fund, Blue Grotto Capital, also dropped its stock, about $10.5 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 5 funds heading into Q4.
Let's also examine hedge fund activity in other stocks similar to Upland Software Inc (NASDAQ:UPLD). These stocks are Qiwi PLC (NASDAQ:QIWI), Gossamer Bio, Inc. (NASDAQ:GOSS), NetGear, Inc. (NASDAQ:NTGR), and Kadmon Holdings, Inc. (NYSE:KDMN). This group of stocks' market valuations are closest to UPLD's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position QIWI,11,42137,1 GOSS,10,80706,-2 NTGR,13,31992,-3 KDMN,28,307150,3 Average,15.5,115496,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.5 hedge funds with bullish positions and the average amount invested in these stocks was $115 million. That figure was $144 million in UPLD's case. Kadmon Holdings, Inc. (NYSE:KDMN) is the most popular stock in this table. On the other hand Gossamer Bio, Inc. (NASDAQ:GOSS) is the least popular one with only 10 bullish hedge fund positions. Upland Software Inc (NASDAQ:UPLD) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd but still beat the market by 15.9 percentage points. Hedge funds were also right about betting on UPLD as the stock returned 31.8% in Q2 (through June 22nd) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.