Should You Buy Roadrunner Transportation Systems Inc (RRTS)?

Consequently, some big names were leading the bulls’ herd. Millennium Management, managed by Israel Englander, assembled the biggest position in Roadrunner Transportation Systems Inc (NYSE:RRTS), carrying a value of $2.6 million at the end of the quarter. Ken Brodkowitz and Mike Vermut’s Newland Capital also made a $1.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Paul Tudor Jones’s Tudor Investment Corp, and D. E. Shaw’s D E Shaw.

Let’s now take a look at hedge fund activity in other stocks similar to Roadrunner Transportation Systems Inc (NYSE:RRTS). These stocks are Merge Healthcare Inc. (NASDAQ:MRGE), The Providence Service Corporation (NASDAQ:PRSC), Southside Bancshares, Inc. (NASDAQ:SBSI), and Dermira Inc (NASDAQ:DERM). This group of stocks’ market caps match RRTS’s market cap.

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 $91 million. That figure was just $53 million in RRTS’s case. Dermira Inc (NASDAQ:DERM) is the most popular stock in this table. On the other hand Southside Bancshares, Inc. (NASDAQ:SBSI) is the least popular one with only 8 bullish hedge fund positions. Roadrunner Transportation Systems Inc (NYSE:RRTS) 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 DERM might be a better candidate to consider a long position.