The market has been volatile due to elections and the potential of another Federal Reserve rate increase. Small cap stocks have been on a tear, as the Russell 2000 ETF (IWM) has outperformed the larger S&P 500 ETF (SPY) by more than 10 percentage points since the end of June. SEC filings and hedge fund investor letters indicate that the smart money seems to be getting back in stocks, and the funds’ movements is one of the reasons why small-cap stocks are red hot. In this article, we analyze what the smart money thinks of Reliance Steel & Aluminum Co (NYSE:RS) and find out how it is affected by hedge funds’ moves.
A couple of weeks ago we reported insider sales at Reliance Steel & Aluminum Co (NYSE:RS). Recent hedge fund filings indicated that some hedge fund managers are also losing interest in the company. RS was in 22 hedge funds’ portfolios at the end of September. There were 27 hedge funds in our database with RS holdings at the end of the previous quarter. 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 Gol Linhas Aereas Inteligentes SA (ADR) (NYSE:GOL), West Pharmaceutical Services Inc. (NYSE:WST), and EnLink Midstream Partners LP (NYSE:ENLK) to gather more data points.
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With all of this in mind, we’re going to take a look at the new action surrounding Reliance Steel & Aluminum Co (NYSE:RS).
How are hedge funds trading Reliance Steel & Aluminum Co (NYSE:RS)?
At Q3’s end, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -19% from one quarter earlier. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Cliff Asness’s AQR Capital Management has the number one position in Reliance Steel & Aluminum Co (NYSE:RS), worth close to $101.7 million, accounting for 0.2% of its total 13F portfolio. The second largest stake is held by Royce & Associates, led by Chuck Royce, holding a $92 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Some other peers that are bullish encompass Phill Gross and Robert Atchinson’s Adage Capital Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Israel Englander’s Millennium Management.