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Is Ultralife Corp. (ULBI) A Good Investment Right Now?

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Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the third quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of Ultralife Corp. (NASDAQ:ULBI) based on that data.

Ultralife Corp. (NASDAQ:ULBI) shareholders have witnessed an increase in support from the world's most elite money managers recently. Ultralife Corp. (NASDAQ:ULBI) was in 4 hedge funds' portfolios at the end of September. The all time high for this statistics is 7. Our calculations also showed that ULBI isn't among the 30 most popular stocks among hedge funds (click for Q3 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.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Gavin Saitowitz of Prelude Capital
Gavin Saitowitz of Prelude Capital

Gavin Saitowitz of Prelude Capital

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now we're going to take a gander at the fresh hedge fund action surrounding Ultralife Corp. (NASDAQ:ULBI).

How are hedge funds trading Ultralife Corp. (NASDAQ:ULBI)?

At Q3's end, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from one quarter earlier. By comparison, 3 hedge funds held shares or bullish call options in ULBI a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies has the largest position in Ultralife Corp. (NASDAQ:ULBI), worth close to $1.5 million, corresponding to less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Israel Englander of Millennium Management, with a $0.5 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining members of the smart money that hold long positions consist of Frederick DiSanto's Ancora Advisors, Gavin Saitowitz and Cisco J. del Valle's Prelude Capital (previously Springbok Capital) and . In terms of the portfolio weights assigned to each position Ancora Advisors allocated the biggest weight to Ultralife Corp. (NASDAQ:ULBI), around 0.01% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.0015 percent of its 13F equity portfolio to ULBI.

Consequently, key money managers have jumped into Ultralife Corp. (NASDAQ:ULBI) headfirst. Prelude Capital (previously Springbok Capital), managed by Gavin Saitowitz and Cisco J. del Valle, initiated the most valuable position in Ultralife Corp. (NASDAQ:ULBI). Prelude Capital (previously Springbok Capital) had $0 million invested in the company at the end of the quarter.

Let's now take a look at hedge fund activity in other stocks similar to Ultralife Corp. (NASDAQ:ULBI). We will take a look at Solid Biosciences Inc. (NASDAQ:SLDB), OncoCyte Corporation (NYSE:OCX), Lipocine Inc (NASDAQ:LPCN), Frequency Electronics, Inc. (NASDAQ:FEIM), China Automotive Systems, Inc. (NASDAQ:CAAS), NeuroBo Pharmaceuticals, Inc. (NASDAQ:NRBO), and Riverview Bancorp, Inc. (NASDAQ:RVSB). This group of stocks' market values match ULBI's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SLDB,11,26616,-1 OCX,5,29185,-2 LPCN,3,663,-1 FEIM,4,9778,0 CAAS,1,1503,0 NRBO,2,1406,-1 RVSB,10,4842,1 Average,5.1,10570,-0.6 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 5.1 hedge funds with bullish positions and the average amount invested in these stocks was $11 million. That figure was $2 million in ULBI's case. Solid Biosciences Inc. (NASDAQ:SLDB) is the most popular stock in this table. On the other hand China Automotive Systems, Inc. (NASDAQ:CAAS) is the least popular one with only 1 bullish hedge fund positions. Ultralife Corp. (NASDAQ:ULBI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ULBI is 38.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on ULBI as the stock returned 16.4% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.

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