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Royal Bank of Canada (USA) (RY): Hedge Fund and Insider Sentiment Unchanged, What Should You Do?

What’s a smart Royal Bank of Canada (USA) (NYSE:RY) investor to do?

In today’s marketplace, there are a multitude of metrics market participants can use to watch stocks. A pair of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite investment managers can outpace the S&P 500 by a solid margin (see just how much).

Just as key, optimistic insider trading sentiment is a second way to analyze the world of equities. Obviously, there are a number of motivations for an upper level exec to cut shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several academic studies have demonstrated the useful potential of this method if “monkeys” understand where to look (learn more here).

Now that that’s out of the way, we’re going to study the recent info about Royal Bank of Canada (USA) (NYSE:RY).

Royal Bank of Canada (USA) (NYSE:RY)

How have hedgies been trading Royal Bank of Canada (USA) (NYSE:RY)?

At Q2’s end, a total of 11 of the hedge funds we track were long in this stock, a change of 0% from the first quarter. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes substantially.

According to our 13F database, Ken Fisher’s Fisher Asset Management had the biggest position in Royal Bank of Canada (USA) (NYSE:RY), worth close to $367.6 million, accounting for 1% of its total 13F portfolio. The second largest stake is held by Tetrem Capital Management, managed by Daniel Bubis, which held a $198.8 million position; the fund has 6.6% of its 13F portfolio invested in the stock. Other peers that are bullish include Robert B. Gillam’s McKinley Capital Management, Jim Simons’s Renaissance Technologies and D. E. Shaw’s D E Shaw.

Because Royal Bank of Canada (USA) (NYSE:RY) has faced bearish sentiment from the entirety of the hedge funds we track, we can see that there were a few hedge funds that slashed their entire stakes heading into Q2. At the top of the heap, D. E. Shaw’s D E Shaw dumped the largest investment of the “upper crust” of funds we key on, totaling about $28.9 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital was right behind this move, as the fund sold off about $5.6 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

How have insiders been trading Royal Bank of Canada (USA) (NYSE:RY)?

Bullish insider trading is best served when the company in focus has experienced transactions within the past half-year. Over the last six-month time period, Royal Bank of Canada (USA) (NYSE:RY) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Using the results demonstrated by our studies, regular investors must always watch hedge fund and insider trading sentiment, and Royal Bank of Canada (USA) (NYSE:RY) is an important part of this process.

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