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Is UTL A Good Stock To Buy Now?

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·6 min read
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Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Unitil Corporation (NYSE:UTL).

Is UTL a good stock to buy now? The smart money was becoming more confident. The number of long hedge fund positions inched up by 2 lately. Unitil Corporation (NYSE:UTL) was in 11 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 13. Our calculations also showed that UTL 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). There were 9 hedge funds in our database with UTL holdings at the end of June.

Video: Watch our video about the top 5 most popular hedge fund stocks.

To most market participants, hedge funds are viewed as slow, outdated financial tools of yesteryear. While there are more than 8000 funds in operation today, Our researchers look at the moguls of this group, about 850 funds. These hedge fund managers have their hands on most of the hedge fund industry's total asset base, and by paying attention to their best stock picks, Insider Monkey has discovered many investment strategies that have historically exceeded the broader indices. Insider Monkey's flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .

Fred DiSanto Ancora Advisors
Fred DiSanto Ancora Advisors

Fred DiSanto of Ancora Advisors

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 15 best blue chip stocks 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 let's analyze the fresh hedge fund action encompassing Unitil Corporation (NYSE:UTL).

Do Hedge Funds Think UTL Is A Good Stock To Buy Now?

At the end of the third quarter, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 22% from the previous quarter. By comparison, 13 hedge funds held shares or bullish call options in UTL a year ago. With hedgies' capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes substantially (or already accumulated large positions).

The largest stake in Unitil Corporation (NYSE:UTL) was held by Renaissance Technologies, which reported holding $33 million worth of stock at the end of September. It was followed by Impax Asset Management with a $4.5 million position. Other investors bullish on the company included GLG Partners, Two Sigma Advisors, and ExodusPoint Capital. In terms of the portfolio weights assigned to each position Impax Asset Management allocated the biggest weight to Unitil Corporation (NYSE:UTL), around 0.04% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.03 percent of its 13F equity portfolio to UTL.

With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. ExodusPoint Capital, managed by Michael Gelband, initiated the most valuable position in Unitil Corporation (NYSE:UTL). ExodusPoint Capital had $0.9 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also made a $0.7 million investment in the stock during the quarter. The other funds with brand new UTL positions are Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital and Frederick DiSanto's Ancora Advisors.

Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Unitil Corporation (NYSE:UTL) but similarly valued. These stocks are Veeco Instruments Inc. (NASDAQ:VECO), National Presto Industries Inc. (NYSE:NPK), Gladstone Commercial Corporation (NASDAQ:GOOD), Eagle Pharmaceuticals Inc (NASDAQ:EGRX), Amneal Pharmaceuticals, Inc. (NYSE:AMRX), Loop Industries, Inc. (NASDAQ:LOOP), and Agilysys, Inc. (NASDAQ:AGYS). This group of stocks' market values match UTL's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VECO,19,290411,-1 NPK,11,60130,3 GOOD,8,48516,1 EGRX,16,99485,0 AMRX,11,20102,0 LOOP,2,4442,0 AGYS,17,184719,-2 Average,12,101115,0.1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $101 million. That figure was $45 million in UTL's case. Veeco Instruments Inc. (NASDAQ:VECO) is the most popular stock in this table. On the other hand Loop Industries, Inc. (NASDAQ:LOOP) is the least popular one with only 2 bullish hedge fund positions. Unitil Corporation (NYSE:UTL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for UTL is 58.9. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on UTL as the stock returned 13.3% since the end of the third quarter (through 12/8) 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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