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Hedge Funds Have Never Been This Bullish On RBC Bearings Incorporated (ROLL)

The 700+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31. 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 RBC Bearings Incorporated (NASDAQ:ROLL).

RBC Bearings Incorporated (NASDAQ:ROLL) investors should pay attention to an increase in activity from the world’s largest hedge funds in recent months. ROLL was in 11 hedge funds’ portfolios at the end of March. There were 6 hedge funds in our database with ROLL holdings at the end of the previous quarter. Our calculations also showed that roll isn’t among the 30 most popular stocks among hedge funds.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Paul Marshall Marshall Wace

Paul Marshall of Marshall Wace

Let’s analyze the recent hedge fund action surrounding RBC Bearings Incorporated (NASDAQ:ROLL).

Hedge fund activity in RBC Bearings Incorporated (NASDAQ:ROLL)

At the end of the first quarter, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 83% from one quarter earlier. By comparison, 7 hedge funds held shares or bullish call options in ROLL a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with ROLL Positions

Among these funds, Royce & Associates held the most valuable stake in RBC Bearings Incorporated (NASDAQ:ROLL), which was worth $42.2 million at the end of the first quarter. On the second spot was Millennium Management which amassed $6.3 million worth of shares. Moreover, Citadel Investment Group, Marshall Wace LLP, and GLG Partners were also bullish on RBC Bearings Incorporated (NASDAQ:ROLL), allocating a large percentage of their portfolios to this stock.

With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Millennium Management, managed by Israel Englander, created the largest position in RBC Bearings Incorporated (NASDAQ:ROLL). Millennium Management had $6.3 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $0.7 million position during the quarter. The following funds were also among the new ROLL investors: Michael Platt and William Reeves’s BlueCrest Capital Mgmt., Benjamin A. Smith’s Laurion Capital Management, and Dmitry Balyasny’s Balyasny Asset Management.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as RBC Bearings Incorporated (NASDAQ:ROLL) but similarly valued. These stocks are Tempur Sealy International Inc. (NYSE:TPX), Envestnet Inc (NYSE:ENV), UMB Financial Corporation (NASDAQ:UMBF), and Energizer Holdings, Inc. (NYSE:ENR). This group of stocks’ market values are closest to ROLL’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TPX 29 1175502 -2
ENV 17 104260 5
UMBF 9 49060 -2
ENR 24 254116 3
Average 19.75 395735 1

View table here if you experience formatting issues.

As you can see these stocks had an average of 19.75 hedge funds with bullish positions and the average amount invested in these stocks was $396 million. That figure was $55 million in ROLL’s case. Tempur Sealy International Inc. (NYSE:TPX) is the most popular stock in this table. On the other hand UMB Financial Corporation (NASDAQ:UMBF) is the least popular one with only 9 bullish hedge fund positions. RBC Bearings Incorporated (NASDAQ:ROLL) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on ROLL as the stock returned 21.4% during the same time frame and outperformed the market by an even larger margin.

Disclosure: None. This article was originally published at Insider Monkey.

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