Why Do Hedge Funds Love Rowan Companies PLC (RDC)?

Because Rowan Companies PLC (NYSE:RDC) has experienced bearish sentiment from the aggregate hedge fund industry, logic holds that there is a sect of fund managers that slashed their full holdings in the third quarter. It’s worth mentioning that Jonathan Barrett and Paul Segal’s Luminus Management cut the biggest stake of all the hedgies tracked by Insider Monkey, valued at an estimated $12.8 million in call options. Sander Gerber’s fund, Hudson Bay Capital Management, also dropped its call options., about $5.7 million worth of stock. These transactions are intriguing to say the least, as total hedge fund interest fell by 3 funds in the third quarter.

Let’s go over hedge fund activity in other stocks similar to Rowan Companies PLC (NYSE:RDC). These stocks are WESCO International, Inc. (NYSE:WCC), Laredo Petroleum Holdings Inc (NYSE:LPI), BofI Holding, Inc. (NASDAQ:BOFI), and Owens & Minor, Inc. (NYSE:OMI). All of these stocks’ market caps are similar to RDC’s market cap.

As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $215 million. WESCO International, Inc. (NYSE:WCC) is the most popular stock in this table. On the other hand BofI Holding, Inc. (NASDAQ:BOFI) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Rowan Companies PLC (NYSE:RDC) is more popular among hedge funds, having also attracted the biggest investment, estimated at $482 million. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.