Rayonier Inc. (NYSE:RYN) investors should pay attention to an increase in hedge fund sentiment of late.
If you’d ask most shareholders, hedge funds are perceived as underperforming, old financial vehicles of yesteryear. While there are greater than 8000 funds with their doors open at the moment, we at Insider Monkey choose to focus on the masters of this club, around 450 funds. It is widely believed that this group has its hands on the lion’s share of the hedge fund industry’s total asset base, and by paying attention to their highest performing stock picks, we have unearthed a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually 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 (check out a sample of our picks).
Just as key, bullish insider trading activity is a second way to break down the stock market universe. There are many incentives for a corporate insider to get rid of shares of his or her company, but only one, very obvious reason why they would buy. Many empirical studies have demonstrated the impressive potential of this method if you understand where to look (learn more here).
Keeping this in mind, we’re going to take a look at the recent action encompassing Rayonier Inc. (NYSE:RYN).
What have hedge funds been doing with Rayonier Inc. (NYSE:RYN)?
In preparation for this quarter, a total of 13 of the hedge funds we track held long positions in this stock, a change of 8% from the first quarter. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings meaningfully.
When looking at the hedgies we track, First Eagle Investment Management, managed by Jean-Marie Eveillard, holds the largest position in Rayonier Inc. (NYSE:RYN). First Eagle Investment Management has a $227.7 million position in the stock, comprising 0.8% of its 13F portfolio. On First Eagle Investment Management’s heels is Renaissance Technologies, managed by Jim Simons, which held a $146 million position; 0.4% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions include Chuck Royce’s Royce & Associates, Martin D. Sass’s MD Sass and Wayne Cooperman’s Cobalt Capital Management.
As one would reasonably expect, some big names have jumped into Rayonier Inc. (NYSE:RYN) headfirst. D E Shaw, managed by D. E. Shaw, assembled the largest call position in Rayonier Inc. (NYSE:RYN). D E Shaw had 4.7 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also made a $1.5 million investment in the stock during the quarter. The only other fund with a brand new RYN position is John Thiessen’s Vertex One Asset Management.
How are insiders trading Rayonier Inc. (NYSE:RYN)?
Insider trading activity, especially when it’s bullish, is particularly usable when the primary stock in question has experienced transactions within the past 180 days. Over the last 180-day time period, Rayonier Inc. (NYSE:RYN) has experienced zero unique insiders buying, and 5 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Rayonier Inc. (NYSE:RYN). These stocks are Jewett-Cameron Trading Co Ltd. (NASDAQ:JCTCF), Patrick Industries, Inc. (NASDAQ:PATK), Pope Resources L.P. (NASDAQ:POPE), Deltic Timber Corp (NYSE:DEL), and Weyerhaeuser Company (NYSE:WY). This group of stocks are the members of the lumber, wood production industry and their market caps are closest to RYN’s market cap.