Do Hedge Funds Love Revlon Inc (REV)?

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Revlon Inc (NYSE:REV) in this article.

Revlon Inc (NYSE:REV) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 33 hedge funds’ portfolios at the end of the first quarter of 2021. Our calculations also showed that REV isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare REV to other stocks including PLBY Group, Inc. (NASDAQ:PLBY), Flushing Financial Corporation (NASDAQ:FFIC), and Heritage-Crystal Clean, Inc. (NASDAQ:HCCI) to get a better sense of its popularity.

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Henrik Rhenman of Rhenman & Partners Asset Management

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Do Hedge Funds Think REV Is A Good Stock To Buy Now?

At the end of the first quarter, a total of 33 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards REV over the last 23 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

More specifically, Pzena Investment Management was the largest shareholder of Revlon Inc (NYSE:REV), with a stake worth $82.2 million reported as of the end of March. Trailing Pzena Investment Management was SQN Investors, which amassed a stake valued at $42.3 million. Praesidium Investment Management Company, Sectoral Asset Management, and Pura Vida Investments were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position SCW Capital Management allocated the biggest weight to Revlon Inc (NYSE:REV), around 11.3% of its 13F portfolio. P.A.W. CAPITAL PARTNERS is also relatively very bullish on the stock, designating 2.39 percent of its 13F equity portfolio to REV.

Since Revlon Inc (NYSE:REV) has faced falling interest from hedge fund managers, it’s easy to see that there lies a certain “tier” of hedgies that slashed their entire stakes by the end of the first quarter. Interestingly, Will Cook’s Sunriver Management dropped the biggest position of the “upper crust” of funds followed by Insider Monkey, valued at close to $14.2 million in stock, and Jamie Zimmerman’s Litespeed Management was right behind this move, as the fund cut about $11.5 million worth. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now review hedge fund activity in other stocks similar to Revlon Inc (NYSE:REV). We will take a look at PLBY Group, Inc. (NASDAQ:PLBY), Flushing Financial Corporation (NASDAQ:FFIC), Heritage-Crystal Clean, Inc. (NASDAQ:HCCI), Dorian LPG Ltd (NYSE:LPG), Tarsus Pharmaceuticals, Inc. (NASDAQ:TARS), Chinook Therapeutics, Inc. (NASDAQ:KDNY), and Beazer Homes USA, Inc. (NYSE:BZH). This group of stocks’ market valuations are closest to REV’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PLBY 13 56101 13
FFIC 11 42985 1
HCCI 10 69425 -2
LPG 18 99388 4
TARS 8 267023 2
KDNY 15 189590 0
BZH 12 26820 2
Average 12.4 107333 2.9

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.4 hedge funds with bullish positions and the average amount invested in these stocks was $107 million. That figure was $358 million in REV’s case. Dorian LPG Ltd (NYSE:LPG) is the most popular stock in this table. On the other hand Tarsus Pharmaceuticals, Inc. (NASDAQ:TARS) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Revlon Inc (NYSE:REV) is more popular among hedge funds. Our overall hedge fund sentiment score for REV is 81.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 22.8% in 2021 through July 2nd and still beat the market by 6 percentage points. Unfortunately REV wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on REV were disappointed as the stock returned 1.1% since the end of the first quarter (through 7/2) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.