Insider Monkey finished processing more than 738 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2019. What do these smart investors think about Universal Logistics Holdings, Inc. (NASDAQ:ULH)?
Universal Logistics Holdings, Inc. (NASDAQ:ULH) shareholders have witnessed a decrease in enthusiasm from smart money in recent months. Our calculations also showed that ULH isn't among the 30 most popular stocks among hedge funds.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
We're going to take a glance at the recent hedge fund action encompassing Universal Logistics Holdings, Inc. (NASDAQ:ULH).
Hedge fund activity in Universal Logistics Holdings, Inc. (NASDAQ:ULH)
Heading into the second quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -9% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ULH over the last 15 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Royce & Associates, managed by Chuck Royce, holds the biggest position in Universal Logistics Holdings, Inc. (NASDAQ:ULH). Royce & Associates has a $12.5 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Renaissance Technologies, managed by Jim Simons, which holds a $3.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish consist of Cliff Asness's AQR Capital Management, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital and D. E. Shaw's D E Shaw.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Navellier & Associates. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because none of the 700+ hedge funds tracked by Insider Monkey identified ULH as a viable investment and initiated a position in the stock.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Universal Logistics Holdings, Inc. (NASDAQ:ULH) but similarly valued. We will take a look at Aegion Corp (NASDAQ:AEGN), National CineMedia, Inc. (NASDAQ:NCMI), Hemisphere Media Group Inc (NASDAQ:HMTV), and Arcus Biosciences, Inc. (NYSE:RCUS). This group of stocks' market valuations match ULH's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AEGN,8,24550,-1 NCMI,18,34063,-1 HMTV,8,46712,2 RCUS,8,72854,-1 Average,10.5,44545,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $45 million. That figure was $22 million in ULH's case. National CineMedia, Inc. (NASDAQ:NCMI) is the most popular stock in this table. On the other hand Aegion Corp (NASDAQ:AEGN) is the least popular one with only 8 bullish hedge fund positions. Universal Logistics Holdings, Inc. (NASDAQ:ULH) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on ULH as the stock returned 6.5% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.