Hedge Funds Are Buying Raymond James Financial, Inc. (RJF)

Hedge funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow over 700 of the best-performing investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Raymond James Financial, Inc. (NYSE:RJF) , so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Is Raymond James Financial, Inc. (NYSE:RJF) worth your attention right now? The best stock pickers are in a bullish mood. The number of bullish hedge fund investments improved by 1 recently. There were 16 hedge funds in our database with RJF holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Kohl’s Corporation (NYSE:KSS), Oaktree Capital Group LLC (NYSE:OAK), and NVR, Inc. (NYSE:NVR) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

Now, let’s take a look at the recent action regarding Raymond James Financial, Inc. (NYSE:RJF).

How have hedgies been trading Raymond James Financial, Inc. (NYSE:RJF)?

Heading into the fourth quarter of 2016, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, an incerase of 6% from one quarter earlier. By comparison, 14 hedge funds held shares or bullish call options in RJF heading into this year. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Steven Richman’s East Side Capital (RR Partners) has the number one position in Raymond James Financial, Inc. (NYSE:RJF), worth close to $95.8 million, corresponding to 4.6% of its total 13F portfolio. The second most bullish fund manager is Fisher Asset Management, led by Ken Fisher, which holds a $93.4 million position; 0.2% of its 13F portfolio is allocated to the company. Some other members of the smart money with similar optimism encompass Cliff Asness’s AQR Capital Management, Charles de Vaulx’s International Value Advisers and Paul Tudor Jones’s Tudor Investment Corp. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Consequently, specific money managers have jumped into Raymond James Financial, Inc. (NYSE:RJF) headfirst. Tudor Investment Corp, led by Paul Tudor Jones, assembled the most valuable position in Raymond James Financial, Inc. (NYSE:RJF). According to regulatory filings, the fund had $16.7 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $4.7 million position during the quarter. The other funds with new positions in the stock are Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Ken Griffin’s Citadel Investment Group, and Glenn Russell Dubin’s Highbridge Capital Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Raymond James Financial, Inc. (NYSE:RJF) but similarly valued. These stocks are Kohl’s Corporation (NYSE:KSS), Oaktree Capital Group LLC (NYSE:OAK), NVR, Inc. (NYSE:NVR), and Apartment Investment and Management Co. (NYSE:AIV). This group of stocks’ market caps are similar to RJF’s market cap.

As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $324 million. That figure was $329 million in RJF’s case. Kohl’s Corporation (NYSE:KSS) is the most popular stock in this table. On the other hand Oaktree Capital Group LLC (NYSE:OAK) is the least popular one with only 16 bullish hedge fund positions. Raymond James Financial, Inc. (NYSE:RJF) 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 KSS might be a better candidate to consider taking a long position in.

Disclosure: none.