Hedge Funds Are Nibbling On CVR Partners LP (UAN)

·5 min read

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 CVR Partners LP (NYSE:UAN).

CVR Partners LP (NYSE:UAN) was in 3 hedge funds' portfolios at the end of March. The all time high for this statistic is 5. UAN shareholders have witnessed an increase in activity from the world's largest hedge funds of late. There were 1 hedge funds in our database with UAN positions at the end of the fourth quarter. Our calculations also showed that UAN isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).

If you'd ask most investors, hedge funds are assumed to be underperforming, old investment tools of the past. While there are greater than 8000 funds trading at the moment, We look at the masters of this club, about 850 funds. These investment experts handle bulk of the smart money's total asset base, and by tracking their matchless equity investments, Insider Monkey has unsheathed various investment strategies that have historically beaten the S&P 500 index. Insider Monkey's flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Matthew Hulsizer PEAK6 Capital
Matthew Hulsizer PEAK6 Capital

Matthew Hulsizer of PEAK6 Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $26 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Now let's take a look at the fresh hedge fund action regarding CVR Partners LP (NYSE:UAN).

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

At first quarter's end, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 200% from the previous quarter. The graph below displays the number of hedge funds with bullish position in UAN over the last 23 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in CVR Partners LP (NYSE:UAN) was held by Glendon Capital Management, which reported holding $9.5 million worth of stock at the end of December. It was followed by Citadel Investment Group with a $1 million position. The only other hedge fund that is bullish on the company was Citadel Investment Group.

Consequently, key money managers have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, initiated the biggest position in CVR Partners LP (NYSE:UAN). Citadel Investment Group had $0.6 million invested in the company at the end of the quarter. Matthew Hulsizer's PEAK6 Capital Management also made a $0.4 million investment in the stock during the quarter. The only other fund with a new position in the stock is Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital.

Let's go over hedge fund activity in other stocks - not necessarily in the same industry as CVR Partners LP (NYSE:UAN) but similarly valued. These stocks are Zix Corporation (NASDAQ:ZIXI), Legacy Housing Corporation (NASDAQ:LEGH), Motorcar Parts of America, Inc. (NASDAQ:MPAA), D8 Holdings Corp. (NYSE:DEH), Star Group L.P. (NYSE:SGU), Global Indemnity Group LLC (NASDAQ:GBLI), and Freeline Therapeutics Holdings plc (NASDAQ:FRLN). This group of stocks' market caps are closest to UAN's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ZIXI,10,18156,-4 LEGH,7,23941,1 MPAA,8,74522,-1 DEH,27,147823,2 SGU,6,59966,-4 GBLI,3,49773,-3 FRLN,5,16505,-1 Average,9.4,55812,-1.4 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 9.4 hedge funds with bullish positions and the average amount invested in these stocks was $56 million. That figure was $10 million in UAN's case. D8 Holdings Corp. (NYSE:DEH) is the most popular stock in this table. On the other hand Global Indemnity Group LLC (NASDAQ:GBLI) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks CVR Partners LP (NYSE:UAN) is even less popular than GBLI. Our overall hedge fund sentiment score for UAN is 25. 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. Hedge funds clearly dropped the ball on UAN as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. A small number of hedge funds were also right about betting on UAN as the stock returned 62.9% since Q1 (through June 11th) 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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