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Hedge Funds Are Crazy About RR Donnelley & Sons Co (RRD)

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RR Donnelley & Sons Co (NASDAQ:RRD) was in 23 hedge funds’ portfolio at the end of March. RRD has experienced an increase in support from the world’s most elite money managers in recent months. There were 22 hedge funds in our database with RRD positions at the end of the previous quarter.

If you’d ask most investors, hedge funds are seen as slow, old investment tools of yesteryear. While there are more than 8000 funds with their doors open at the moment, we at Insider Monkey look at the masters of this group, around 450 funds. Most estimates calculate that this group controls the majority of the hedge fund industry’s total asset base, and by paying attention to their best equity investments, we have come up with a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outstripped 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

RR Donnelley & Sons Co (NASDAQ:RRD)Just as integral, optimistic insider trading sentiment is a second way to break down the marketplace. Obviously, there are many reasons for an upper level exec to downsize shares of his or her company, but just one, very simple reason why they would buy. Many empirical studies have demonstrated the market-beating potential of this tactic if investors understand what to do (learn more here).

With all of this in mind, we’re going to take a peek at the key action regarding RR Donnelley & Sons Co (NASDAQ:RRD).

Hedge fund activity in RR Donnelley & Sons Co (NASDAQ:RRD)

In preparation for this quarter, a total of 23 of the hedge funds we track were bullish in this stock, a change of 5% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings considerably.

When looking at the hedgies we track, Chase Coleman and Feroz Dewan’s Tiger Global Management LLC had the largest position in RR Donnelley & Sons Co (NASDAQ:RRD), worth close to $42.2 million, accounting for 0.7% of its total 13F portfolio. Coming in second is Elm Ridge Capital, managed by Ron Gutfleish, which held a $38.4 million position; 4.3% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include Cliff Asness’s AQR Capital Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Neil Chriss’s Hutchin Hill Capital.

With a general bullishness amongst the heavyweights, key hedge funds have jumped into RR Donnelley & Sons Co (NASDAQ:RRD) headfirst. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, created the largest position in RR Donnelley & Sons Co (NASDAQ:RRD). Arrowstreet Capital had 5.8 million invested in the company at the end of the quarter. Neil Chriss’s Hutchin Hill Capital also initiated a $4.1 million position during the quarter. The following funds were also among the new RRD investors: Boaz Weinstein’s Saba Capital, Andy Redleaf’s Whitebox Advisors, and Mike Vranos’s Ellington.

Insider trading activity in RR Donnelley & Sons Co (NASDAQ:RRD)

Insider trading activity, especially when it’s bullish, is at its handiest when the company we’re looking at has seen transactions within the past half-year. Over the latest half-year time period, RR Donnelley & Sons Co (NASDAQ:RRD) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to RR Donnelley & Sons Co (NASDAQ:RRD). These stocks are HMS Holdings Corp. (NASDAQ:HMSY), Ritchie Bros. Auctioneers (USA) (NYSE:RBA), Deluxe Corporation (NYSE:DLX), Portfolio Recovery Associates, Inc. (NASDAQ:PRAA), and Lender Processing Services, Inc. (NYSE:LPS). This group of stocks are the members of the business services industry and their market caps resemble RRD’s market cap.

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