Is Resolute Forest Products Inc (NYSE:RFP) the right investment to pursue these days? Investors who are in the know are turning bullish. The number of long hedge fund bets moved up by 4 in recent months.
In the 21st century investor’s toolkit, there are plenty of methods market participants can use to monitor publicly traded companies. A couple of the best are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite investment managers can trounce the S&P 500 by a significant margin (see just how much).
Equally as beneficial, bullish insider trading activity is another way to break down the financial markets. Obviously, there are a variety of motivations for an upper level exec to downsize shares of his or her company, but only one, very simple reason why they would behave bullishly. Various academic studies have demonstrated the impressive potential of this strategy if piggybackers know where to look (learn more here).
With these "truths" under our belt, we're going to take a peek at the key action encompassing Resolute Forest Products Inc (NYSE:RFP).
At year's end, a total of 21 of the hedge funds we track were bullish in this stock, a change of 24% from one quarter earlier. With hedge funds' capital changing hands, there exists an "upper tier" of key hedge fund managers who were upping their holdings substantially.
According to our comprehensive database, Prem Watsa's Fairfax Financial Holdings had the most valuable position in Resolute Forest Products Inc (NYSE:RFP), worth close to $328 million, accounting for 13.1% of its total 13F portfolio. On Fairfax Financial Holdings's heels is Steelhead Partners, managed by Michael Johnston, which held a $173 million position; the fund has 12.8% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include John Paulson's Paulson & Co, Francis Chou's Chou Associates Management and Jon Bauer's Contrarian Capital.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Owl Creek Asset Management, managed by Jeffrey Altman, initiated the most valuable position in Resolute Forest Products Inc (NYSE:RFP). Owl Creek Asset Management had 3 million invested in the company at the end of the quarter. Louis Bacon's Moore Global Investments also initiated a $1 million position during the quarter. The other funds with brand new RFP positions are Thomas Lenox Kempner's Davidson Kempner, Gifford Combs's Dalton Investments, and Tom Gayner's Markel Gayner Asset Management.
Bullish insider trading is best served when the company in question has experienced transactions within the past six months. Over the last half-year time frame, Resolute Forest Products Inc (NYSE:RFP) has experienced 2 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
With the results demonstrated by Insider Monkey's studies, retail investors should always keep an eye on hedge fund and insider trading activity, and Resolute Forest Products Inc (NYSE:RFP) shareholders fit into this picture quite nicely.
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