Is United Insurance Holdings Corp. (NDA) (NASDAQ:UIHC) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is United Insurance Holdings Corp. (NDA) (NASDAQ:UIHC) the right pick for your portfolio? The best stock pickers are turning bullish. The number of bullish hedge fund positions improved by 2 in recent months. Our calculations also showed that UIHC isn't among the 30 most popular stocks among hedge funds. UIHC was in 6 hedge funds' portfolios at the end of December. There were 4 hedge funds in our database with UIHC holdings at the end of the previous quarter.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (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 27.5% through March 12, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's take a glance at the new hedge fund action encompassing United Insurance Holdings Corp. (NDA) (NASDAQ:UIHC).
Hedge fund activity in United Insurance Holdings Corp. (NDA) (NASDAQ:UIHC)
At Q4's end, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 50% from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in UIHC over the last 14 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.
The largest stake in United Insurance Holdings Corp. (NDA) (NASDAQ:UIHC) was held by Polaris Capital Management, which reported holding $2.4 million worth of stock at the end of December. It was followed by Stadium Capital Management with a $0.9 million position. Other investors bullish on the company included Ancora Advisors, PDT Partners, and Renaissance Technologies.
As one would reasonably expect, key hedge funds have jumped into United Insurance Holdings Corp. (NDA) (NASDAQ:UIHC) headfirst. PDT Partners, managed by Peter Muller, assembled the most outsized position in United Insurance Holdings Corp. (NDA) (NASDAQ:UIHC). PDT Partners had $0.3 million invested in the company at the end of the quarter. Jim Simons's Renaissance Technologies also initiated a $0.3 million position during the quarter.
Let's go over hedge fund activity in other stocks similar to United Insurance Holdings Corp. (NDA) (NASDAQ:UIHC). We will take a look at Delek Logistics Partners LP (NYSE:DKL), G1 Therapeutics, Inc. (NASDAQ:GTHX), Patrick Industries, Inc. (NASDAQ:PATK), and AK Steel Holding Corporation (NYSE:AKS). This group of stocks' market caps resemble UIHC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position DKL,2,337,1 GTHX,11,36299,-9 PATK,24,62486,6 AKS,15,29356,-5 Average,13,32120,-1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $32 million. That figure was $5 million in UIHC's case. Patrick Industries, Inc. (NASDAQ:PATK) is the most popular stock in this table. On the other hand Delek Logistics Partners LP (NYSE:DKL) is the least popular one with only 2 bullish hedge fund positions. United Insurance Holdings Corp. (NDA) (NASDAQ:UIHC) 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 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately UIHC wasn't nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); UIHC investors were disappointed as the stock returned -5.7% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.