RPC, Inc. (NYSE:RES) investors should pay attention to a decrease in support from the world’s most elite money managers of late.
To most traders, hedge funds are assumed to be slow, outdated investment vehicles of the past. While there are greater than 8000 funds in operation today, we choose to focus on the top tier of this group, around 450 funds. It is widely believed that this group has its hands on the lion’s share of the smart money’s total capital, and by keeping an eye on their best investments, we have formulated a number of investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 24 percentage points in 7 months (see the details here).
Equally as key, optimistic insider trading sentiment is another way to parse down the marketplace. There are many incentives for an executive to drop shares of his or her company, but just one, very simple reason why they would initiate a purchase. Several empirical studies have demonstrated the market-beating potential of this tactic if “monkeys” understand what to do (learn more here).
With these “truths” under our belt, it’s important to take a gander at the latest action regarding RPC, Inc. (NYSE:RES).
How have hedgies been trading RPC, Inc. (NYSE:RES)?
In preparation for this year, a total of 9 of the hedge funds we track held long positions in this stock, a change of -25% from the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes substantially.
When looking at the hedgies we track, Mario Gabelli’s GAMCO Investors had the largest position in RPC, Inc. (NYSE:RES), worth close to $82.1 million, accounting for 0.6% of its total 13F portfolio. Sitting at the No. 2 spot is Chuck Royce of Royce & Associates, with a $32 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining hedgies with similar optimism include Ken Griffin’s Citadel Investment Group, Cliff Asness’s AQR Capital Management and Joel Greenblatt’s Gotham Asset Management.
Judging by the fact that RPC, Inc. (NYSE:RES) has witnessed a declination in interest from the aggregate hedge fund industry, logic holds that there were a few funds that slashed their entire stakes in Q4. It’s worth mentioning that Sean Cullinan’s Point State Capital sold off the largest stake of the 450+ funds we key on, totaling about $8.6 million in stock.. David Gallo’s fund, Valinor Management LLC, also dumped its stock, about $3.6 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 3 funds in Q4.
How have insiders been trading RPC, Inc. (NYSE:RES)?
Bullish insider trading is most useful when the primary stock in question has seen transactions within the past half-year. Over the latest half-year time frame, RPC, Inc. (NYSE:RES) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to RPC, Inc. (NYSE:RES). These stocks are Oil States International, Inc. (NYSE:OIS), Precision Drilling Corp (USA) (NYSE:PDS), Forum Energy Technologies Inc (NYSE:FET), Superior Energy Services, Inc. (NYSE:SPN), and Dril-Quip, Inc. (NYSE:DRQ). This group of stocks belong to the oil & gas equipment & services industry and their market caps resemble RES’s market cap.