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Hedge Funds Have Never Been This Bullish On Rattler Midstream LP (RTLR)

The 700+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 28. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Rattler Midstream LP (NASDAQ:RTLR).

Is Rattler Midstream LP (NASDAQ:RTLR) a superb investment right now? The smart money is becoming more confident. The number of bullish hedge fund bets rose by 20 lately. Our calculations also showed that RTLR isn’t among the 30 most popular stocks among hedge funds (view the video below). RTLR was in 20 hedge funds’ portfolios at the end of the second quarter of 2019. There were 0 hedge funds in our database with RTLR positions at the end of the previous quarter.
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

At the moment there are tons of signals stock traders can use to size up their stock investments. A pair of the most under-the-radar signals are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the best money managers can outpace the market by a significant margin (see the details here).

Keith Meister, Corvex Capital

Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s take a look at the key hedge fund action surrounding Rattler Midstream LP (NASDAQ:RTLR).

How have hedgies been trading Rattler Midstream LP (NASDAQ:RTLR)?

Heading into the third quarter of 2019, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 20 from the first quarter of 2019. By comparison, 0 hedge funds held shares or bullish call options in RTLR 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.

RTLR_oct2019

The largest stake in Rattler Midstream LP (NASDAQ:RTLR) was held by Zimmer Partners, which reported holding $43.5 million worth of stock at the end of March. It was followed by Corvex Capital with a $40.7 million position. Other investors bullish on the company included Cardinal Capital, Alyeska Investment Group, and Arosa Capital Management.

Now, specific money managers have been driving this bullishness. Zimmer Partners, managed by Stuart J. Zimmer, created the biggest position in Rattler Midstream LP (NASDAQ:RTLR). Zimmer Partners had $43.5 million invested in the company at the end of the quarter. Keith Meister’s Corvex Capital also made a $40.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Amy Minella’s Cardinal Capital, Anand Parekh’s Alyeska Investment Group, and Till Bechtolsheimer’s Arosa Capital Management.

Let’s go over hedge fund activity in other stocks similar to Rattler Midstream LP (NASDAQ:RTLR). These stocks are Ryder System, Inc. (NYSE:R), Hamilton Lane Incorporated (NASDAQ:HLNE), Holly Energy Partners, L.P. (NYSE:HEP), and Chemical Financial Corporation (NASDAQ:CHFC). This group of stocks’ market caps match RTLR’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
R 21 352543 2
HLNE 6 56143 -4
HEP 1 2228 -3
CHFC 20 127114 2
Average 12 134507 -0.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $135 million. That figure was $217 million in RTLR’s case. Ryder System, Inc. (NYSE:R) is the most popular stock in this table. On the other hand Holly Energy Partners, L.P. (NYSE:HEP) is the least popular one with only 1 bullish hedge fund positions. Rattler Midstream LP (NASDAQ:RTLR) 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 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately RTLR wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on RTLR were disappointed as the stock returned -8.1% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 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.

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