As we already know from media reports and hedge fund investor letters, many hedge funds lost money in the third quarter, blaming macroeconomic conditions and unpredictable events that hit several sectors, with healthcare among them. Nevertheless, most investors decided to stick to their bullish theses and their long-term focus allows us to profit from the recent declines. In particular, let’s take a look at what hedge funds think about Rubicon Technology, Inc. (NASDAQ:RBCN) in this article.
Is Rubicon Technology, Inc. (NASDAQ:RBCN) a buy, sell, or hold? Investors who are in the know are in a bearish mood. The number of bullish hedge fund bets decreased by 2 recently. The market sentiment was somewhat similar, as the shares of Rubicon Technology, Inc. (NASDAQ:RBCN) dropped 57.61% throughout the quarter. We will discuss more about the hedge funds that held stakes in Rubicon Technology, Inc. (NASDAQ:RBCN) at the end of September.
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 Echelon Corporation (NASDAQ:ELON), Acura Pharmaceuticals, Inc. (NASDAQ:ACUR), and Luna Innovations Incorporated (NASDAQ:LUNA) to gather more data points.
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In the 21st century investor’s toolkit, there are many methods market participants put to use to grade stocks. A pair of the most useful methods are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the top picks of the top investment managers can trounce the broader indices by a superb amount (see the details here).
Keeping this in mind, we’re going to take a gander at the recent action regarding Rubicon Technology, Inc. (NASDAQ:RBCN).
How have hedgies been trading Rubicon Technology, Inc. (NASDAQ:RBCN)?
Heading into Q4, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a decline of 29% from the previous quarter. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Bernard Lambilliotte’s Ecofin Ltd has the biggest position in Rubicon Technology, Inc. (NASDAQ:RBCN), worth close to $1.6 million, corresponding to 0.3% of its total 13F portfolio. Coming in second is Chuck Royce of Royce & Associates, with a $1.2 million position; less than 0.1% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that hold long positions include Renaissance Technologies, and Israel Englander’s Millennium Management.
Due to the fact that Rubicon Technology, Inc. (NASDAQ:RBCN) has witnessed a falling interest from hedge fund managers, it’s safe to say that there is a sect of hedge funds that slashed their positions entirely in the third quarter. At the top of the heap, Peter Muller’s PDT Partners said goodbye to the largest stake of the “upper crust” of funds monitored by Insider Monkey, comprising close to $0.2 million in stock. Ben Levine, Andrew Manuel and Stefan Renold’s fund, LMR Partners, also sold off its stock, about $0.1 million worth of shares. These moves are important to note, as aggregate hedge fund interest dropped by 2 funds in the third quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Rubicon Technology, Inc. (NASDAQ:RBCN) but similarly valued. These stocks are Echelon Corporation (NASDAQ:ELON), Acura Pharmaceuticals, Inc. (NASDAQ:ACUR), Luna Innovations Incorporated (NASDAQ:LUNA), and SMTC Corporation (USA) (NASDAQ:SMTX). This group of stocks’ market values are closest to Rubicon Technology, Inc. (NASDAQ:RBCN)’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ELON | 4 | 3549 | -1 |
| ACUR | 4 | 4373 | 3 |
| LUNA | 4 | 772 | 1 |
| SMTX | 5 | 4093 | 0 |
As you can see, these stocks had an average of 4 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $8 million in Rubicon Technology, Inc. (NASDAQ:RBCN)’s case. SMTC Corporation (USA) (NASDAQ:SMTX) is the most popular stock in this table. On the other hand, Echelon Corporation (NASDAQ:ELON) is the least popular one with only 4 bullish hedge fund positions. Rubicon Technology, Inc. (NASDAQ:RBCN) 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. In this regard, SMTC Corporation (USA) (NASDAQ:SMTX) might be a better candidate to consider a long position.
