The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Rocky Brands, Inc. (NASDAQ:RCKY) based on those filings.
Is Rocky Brands, Inc. (NASDAQ:RCKY) the right pick for your portfolio? Prominent investors are taking a bearish view. The number of long hedge fund positions dropped by 3 lately. Our calculations also showed that RCKY isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now let’s view the key hedge fund action encompassing Rocky Brands, Inc. (NASDAQ:RCKY).
How have hedgies been trading Rocky Brands, Inc. (NASDAQ:RCKY)?
Heading into the second quarter of 2020, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from one quarter earlier. On the other hand, there were a total of 7 hedge funds with a bullish position in RCKY a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Rocky Brands, Inc. (NASDAQ:RCKY) was held by Renaissance Technologies, which reported holding $6.6 million worth of stock at the end of September. It was followed by Arrowstreet Capital with a $1.8 million position. Other investors bullish on the company included GLG Partners, AQR Capital Management, and Millennium Management. In terms of the portfolio weights assigned to each position Winton Capital Management allocated the biggest weight to Rocky Brands, Inc. (NASDAQ:RCKY), around 0.02% of its 13F portfolio. GLG Partners is also relatively very bullish on the stock, designating 0.01 percent of its 13F equity portfolio to RCKY.
Because Rocky Brands, Inc. (NASDAQ:RCKY) has faced bearish sentiment from the aggregate hedge fund industry, we can see that there were a few fund managers that decided to sell off their full holdings in the first quarter. Intriguingly, Ken Grossman and Glen Schneider’s SG Capital Management cut the biggest stake of all the hedgies watched by Insider Monkey, comprising an estimated $2.7 million in stock. Roger Ibbotson’s fund, Zebra Capital Management, also dropped its stock, about $0.3 million worth. These moves are interesting, as total hedge fund interest was cut by 3 funds in the first quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Rocky Brands, Inc. (NASDAQ:RCKY) but similarly valued. We will take a look at Collectors Universe, Inc. (NASDAQ:CLCT), Cambium Networks Corporation (NASDAQ:CMBM), Ohio Valley Banc Corp. (NASDAQ:OVBC), and Nabors Industries Ltd. (NYSE:NBR). This group of stocks’ market values are closest to RCKY’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.75 hedge funds with bullish positions and the average amount invested in these stocks was $12 million. That figure was $12 million in RCKY’s case. Nabors Industries Ltd. (NYSE:NBR) is the most popular stock in this table. On the other hand Ohio Valley Banc Corp. (NASDAQ:OVBC) is the least popular one with only 1 bullish hedge fund positions. Rocky Brands, Inc. (NASDAQ:RCKY) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd but beat the market by 15.9 percentage points. Unfortunately RCKY wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on RCKY were disappointed as the stock returned 5.2% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.