Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Is Rowan Companies PLC (NYSE:RDC) a sound stock to buy now? The best stock pickers are becoming more confident. The number of long hedge fund bets inched up by 2 recently. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Cavium Inc (NASDAQ:CAVM), Washington Federal Inc. (NASDAQ:WAFD), and Pampa Energia S.A. (ADR) (NYSE:PAM) to gather more data points.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
How are hedge funds trading Rowan Companies PLC (NYSE:RDC)?
At the end of the third quarter, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 8% from the second quarter of 2016, though there are still fewer hedge fund positions than 2 quarters earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Blue Harbour Group, managed by Clifton S. Robbins, holds the number one position in Rowan Companies PLC (NYSE:RDC). Blue Harbour Group has a $151.5 million position in the stock, comprising 5.6% of its 13F portfolio. On Blue Harbour Group’s heels is Cliff Asness’ AQR Capital Management, with a $73 million position. Other hedge funds and institutional investors with similar optimism contain Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC, Jonathan Barrett and Paul Segal’s Luminus Management, and Joel Greenblatt’s Gotham Asset Management.