Is Resource America Inc (NASDAQ:REXI) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Hedge fund interest in Resource America Inc (NASDAQ:REXI) shares was flat at the end of last quarter. This is usually a negative indicator. 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 EVINE Live Inc (NASDAQ:EVLV), Perion Network Ltd (NASDAQ:PERI), and ModusLink Global Solutions, Inc. (NASDAQ:MLNK) to gather more data points.
Follow Resource America Inc. (NASDAQ:REXI)
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At the moment there are dozens of formulas stock market investors put to use to evaluate publicly traded companies. A couple of the most under-the-radar formulas are hedge fund and insider trading indicators. We have shown that, historically, those who follow the best picks of the best hedge fund managers can outpace their index-focused peers by a solid margin (see the details here).
With all of this in mind, let’s check out the latest action encompassing Resource America Inc (NASDAQ:REXI).
What does the smart money think about Resource America Inc (NASDAQ:REXI)?
Heading into Q4, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, unchanged from the previous quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Leon Cooperman’s Omega Advisors has the biggest position in Resource America Inc (NASDAQ:REXI), worth close to $5.2 million, amounting to 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Rima Senvest Management, managed by Richard Mashaal, which holds an $3.2 million position; 0.2% of its 13F portfolio is allocated to the stock. Remaining professional money managers that hold long positions consist of John Fichthorn’s Dialectic Capital Management, Wayne Cooperman’s Cobalt Capital Management and Jim Simons’s Renaissance Technologies.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Resource America Inc (NASDAQ:REXI) but similarly valued. We will take a look at EVINE Live Inc (NASDAQ:EVLV), Perion Network Ltd (NASDAQ:PERI), ModusLink Global Solutions, Inc. (NASDAQ:MLNK), and Harmony Merger Corp (NASDAQ:HRMN). This group of stocks’ market values are closest to REXI’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EVLV | 16 | 47630 | 1 |
| PERI | 7 | 3374 | -2 |
| MLNK | 11 | 61293 | 0 |
| HRMN | 4 | 17719 | 1 |
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $33 million, compared to $11 million in REXI’s case. EVINE Live Inc (NASDAQ:EVLV) is the most popular stock in this table. On the other hand, Harmony Merger Corp (NASDAQ:HRMN) is the least popular one with only 4 bullish hedge fund positions. Resource America Inc (NASDAQ:REXI) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard EVLV might be a better candidate to consider a long position.
