Is UGI Stock A Buy or Sell?

Abigail Fisher
·5 min read

We at Insider Monkey have gone over 887 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of December 31st. In this article, we look at what those funds think of UGI Corp (NYSE:UGI) based on that data.

Is UGI stock a buy? UGI Corp (NYSE:UGI) shareholders have witnessed an increase in support from the world's most elite money managers in recent months. UGI Corp (NYSE:UGI) was in 25 hedge funds' portfolios at the end of December. The all time high for this statistic is 27. There were 23 hedge funds in our database with UGI positions at the end of the third quarter. Our calculations also showed that UGI isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).

At the moment there are numerous indicators shareholders use to grade stocks. A pair of the best indicators are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the best picks of the elite hedge fund managers can trounce the broader indices by a healthy margin (see the details here).

Ryan Tolkin, CIO of Schonfeld Strategic Advisors

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now to identify the next stock with 10x upside potential. 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. With all of this in mind we're going to analyze the key hedge fund action surrounding UGI Corp (NYSE:UGI).

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

At the end of December, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of 9% from the previous quarter. The graph below displays the number of hedge funds with bullish position in UGI over the last 22 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Diamond Hill Capital was the largest shareholder of UGI Corp (NYSE:UGI), with a stake worth $103.6 million reported as of the end of December. Trailing Diamond Hill Capital was Renaissance Technologies, which amassed a stake valued at $10.5 million. AQR Capital Management, GLG Partners, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Diamond Hill Capital allocated the biggest weight to UGI Corp (NYSE:UGI), around 0.49% of its 13F portfolio. Invenomic Capital Management is also relatively very bullish on the stock, designating 0.48 percent of its 13F equity portfolio to UGI.

As aggregate interest increased, key money managers were leading the bulls' herd. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the largest position in UGI Corp (NYSE:UGI). Arrowstreet Capital had $3.8 million invested in the company at the end of the quarter. Alec Litowitz and Ross Laser's Magnetar Capital also made a $0.8 million investment in the stock during the quarter. The other funds with brand new UGI positions are Mario Gabelli's GAMCO Investors, Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors, and Mark Coe's Coe Capital Management.

Let's now review hedge fund activity in other stocks - not necessarily in the same industry as UGI Corp (NYSE:UGI) but similarly valued. These stocks are Under Armour Inc (NYSE:UA), Pan American Silver Corp. (NASDAQ:PAAS), Signature Bank (NASDAQ:SBNY), East West Bancorp, Inc. (NASDAQ:EWBC), The Middleby Corporation (NASDAQ:MIDD), TG Therapeutics Inc (NASDAQ:TGTX), and Lumentum Holdings Inc (NASDAQ:LITE). All of these stocks' market caps are similar to UGI's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position UA,47,1451753,-1 PAAS,27,466677,-1 SBNY,28,571010,-7 EWBC,24,403705,4 MIDD,30,313117,0 TGTX,38,1311739,8 LITE,39,545949,-1 Average,33.3,723421,0.3 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 33.3 hedge funds with bullish positions and the average amount invested in these stocks was $723 million. That figure was $181 million in UGI's case. Under Armour Inc (NYSE:UA) is the most popular stock in this table. On the other hand East West Bancorp, Inc. (NASDAQ:EWBC) is the least popular one with only 24 bullish hedge fund positions. UGI Corp (NYSE:UGI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for UGI is 37. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and still beat the market by 0.9 percentage points. A small number of hedge funds were also right about betting on UGI as the stock returned 26.5% since the end of the fourth quarter (through 4/19) 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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