Rentech Nitrogen Partners LP (RNF): Are Hedge Funds Right About This Stock?

Since Rentech Nitrogen Partners LP (NYSE:RNF) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there was a specific group of fund managers who were dropping their full holdings by the end of the third quarter. Interestingly, Glenn W. Welling’s Engaged Capital dropped the largest investment of the “upper crust” of funds watched by Insider Monkey, worth about $1.4 million in stock, and Adam Usdan’s Trellus Management Company was right behind this move, as the fund said goodbye to about $1 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s go over hedge fund activity in other stocks similar to Rentech Nitrogen Partners LP (NYSE:RNF). We will take a look at Opower Inc (NYSE:OPWR), Collegium Pharmaceutical Inc (NASDAQ:COLL), Aerie Pharmaceuticals Inc (NASDAQ:AERI), and TAL International Group, Inc. (NYSE:TAL). This group of stocks’ market valuations match RNF’s market valuation.

As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $83 million. That figure was $8 million in RNF’s case. Aerie Pharmaceuticals Inc (NASDAQ:AERI) is the most popular stock in this table. On the other hand Collegium Pharmaceutical Inc (NASDAQ:COLL) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Rentech Nitrogen Partners LP (NYSE:RNF) is even less popular than COLL. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.