Regional Management Corp (NYSE:RM) was in 8 hedge funds’ portfolio at the end of December. RM shareholders have witnessed a decrease in activity from the world’s largest hedge funds recently. There were 8 hedge funds in our database with RM positions at the end of the previous quarter.
According to most market participants, hedge funds are perceived as underperforming, outdated investment tools of the past. While there are greater than 8000 funds with their doors open today, we at Insider Monkey look at the moguls of this club, close to 450 funds. It is widely believed that this group controls the lion’s share of the hedge fund industry’s total asset base, and by monitoring their highest performing picks, we have revealed a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Equally as important, bullish insider trading activity is a second way to parse down the marketplace. As the old adage goes: there are a variety of incentives for a bullish insider to cut shares of his or her company, but only one, very simple reason why they would behave bullishly. Plenty of empirical studies have demonstrated the valuable potential of this method if piggybackers know where to look (learn more here).
Now, it’s important to take a gander at the key action regarding Regional Management Corp (NYSE:RM).
How are hedge funds trading Regional Management Corp (NYSE:RM)?
At year’s end, a total of 8 of the hedge funds we track were bullish in this stock, a change of 0% from the third quarter. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their stakes substantially.
According to our comprehensive database, Nantahala Capital Management, managed by Wilmot B. Harkey and Daniel Mack, holds the largest position in Regional Management Corp (NYSE:RM). Nantahala Capital Management has a $9 million position in the stock, comprising 1.5% of its 13F portfolio. On Nantahala Capital Management’s heels is Ardsley Partners, managed by Philip Hempleman, which held a $5 million position; 0.5% of its 13F portfolio is allocated to the stock. Some other peers that hold long positions include Ken Griffin’s Citadel Investment Group, Chuck Royce’s Royce & Associates and Andy Redleaf’s Whitebox Advisors.
Since Regional Management Corp (NYSE:RM) has experienced falling interest from the entirety of the hedge funds we track, logic holds that there is a sect of fund managers that slashed their positions entirely last quarter. Intriguingly, Douglas W. Case’s Advanced Investment Partners dumped the largest stake of all the hedgies we key on, comprising close to $1 million in stock. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
How have insiders been trading Regional Management Corp (NYSE:RM)?
Bullish insider trading is particularly usable when the company in question has seen transactions within the past half-year. Over the latest half-year time frame, Regional Management Corp (NYSE:RM) has seen 2 unique insiders buying, and 2 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Regional Management Corp (NYSE:RM). These stocks are Nicholas Financial, Inc. (NASDAQ:NICK), Federal Agricultural Mortgage Corp. (NYSE:AGM), Asset Acceptance Capital Corp. (NASDAQ:AACC), Medallion Financial Corp (NASDAQ:TAXI), and Consumer Portfolio Services, Inc. (NASDAQ:CPSS). This group of stocks belong to the credit services industry and their market caps are closest to RM’s market cap.