Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 750 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is United-Guardian, Inc. (NASDAQ:UG), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
United-Guardian, Inc. (NASDAQ:UG) shares haven't seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 2 hedge funds' portfolios at the end of September. At the end of this article we will also compare UG to other stocks including RiceBran Technologies (NASDAQ:RIBT), Arbutus Biopharma Corp (NASDAQ:ABUS), and Security National Financial Corp. (NASDAQ:SNFCA) to get a better sense of its popularity. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a multitude of formulas market participants put to use to analyze publicly traded companies. A pair of the best formulas are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the best picks of the best investment managers can beat the S&P 500 by a significant margin (see the details here).
[caption id="attachment_375529" align="aligncenter" width="600"] Mario Gabelli of GAMCO Investors[/caption]
We're going to take a peek at the new hedge fund action regarding United-Guardian, Inc. (NASDAQ:UG).
How have hedgies been trading United-Guardian, Inc. (NASDAQ:UG)?
At Q3's end, a total of 2 of the hedge funds tracked by Insider Monkey were bullish on this stock, the same as the second quarter of 2019. The graph below displays the number of hedge funds with bullish position in UG over the last 17 quarters. With the smart money's sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of United-Guardian, Inc. (NASDAQ:UG), with a stake worth $5.1 million reported as of the end of September. Trailing Renaissance Technologies was GAMCO Investors, which amassed a stake valued at $2.8 million.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren't any hedge funds dumping their holdings during the third quarter, there weren't any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven't identified any viable catalysts that can attract investor attention.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as United-Guardian, Inc. (NASDAQ:UG) but similarly valued. We will take a look at RiceBran Technologies (NASDAQ:RIBT), Arbutus Biopharma Corp (NASDAQ:ABUS), Security National Financial Corp. (NASDAQ:SNFCA), and Permianville Royalty Trust (NYSE:PVL). All of these stocks' market caps match UG's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RIBT,4,1516,0 ABUS,7,2516,0 SNFCA,1,812,0 PVL,2,436,1 Average,3.5,1320,0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.5 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $8 million in UG's case. Arbutus Biopharma Corp (NASDAQ:ABUS) is the most popular stock in this table. On the other hand Security National Financial Corp. (NASDAQ:SNFCA) is the least popular one with only 1 bullish hedge fund positions. United-Guardian, Inc. (NASDAQ:UG) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 34.7% in 2019 through November 22nd and outperformed the S&P 500 ETF (SPY) by 8.5 percentage points. Unfortunately UG wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); UG investors were disappointed as the stock returned 1.4% during the fourth quarter (through 11/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.