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Hedge Funds Standing By The Rubicon Project Inc (RUBI)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about The Rubicon Project Inc (NASDAQ:RUBI)?

The Rubicon Project Inc (NASDAQ:RUBI) investors should be aware of a decrease in enthusiasm from smart money lately. RUBI was in 22 hedge funds’ portfolios at the end of the first quarter of 2020. There were 24 hedge funds in our database with RUBI holdings at the end of the previous quarter. Our calculations also showed that RUBI 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.

James Dondero Highland Capital Management

James Dondero of Highland Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s review the key hedge fund action surrounding The Rubicon Project Inc (NASDAQ:RUBI).

Hedge fund activity in The Rubicon Project Inc (NASDAQ:RUBI)

At Q1’s end, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of -8% from the fourth quarter of 2019. On the other hand, there were a total of 25 hedge funds with a bullish position in RUBI a year ago. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

The largest stake in The Rubicon Project Inc (NASDAQ:RUBI) was held by Royce & Associates, which reported holding $8.5 million worth of stock at the end of September. It was followed by Portsea Asset Management with a $8.3 million position. Other investors bullish on the company included Driehaus Capital, Arrowstreet Capital, and Marshall Wace LLP. In terms of the portfolio weights assigned to each position Portsea Asset Management allocated the biggest weight to The Rubicon Project Inc (NASDAQ:RUBI), around 7.49% of its 13F portfolio. P.A.W. CAPITAL PARTNERS is also relatively very bullish on the stock, designating 2.99 percent of its 13F equity portfolio to RUBI.

Because The Rubicon Project Inc (NASDAQ:RUBI) has faced falling interest from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of hedgies that elected to cut their positions entirely heading into Q4. At the top of the heap, Renaissance Technologies cut the biggest stake of the “upper crust” of funds followed by Insider Monkey, comprising about $7 million in stock, and Ravee Mehta’s Nishkama Capital was right behind this move, as the fund cut about $3.1 million worth. These transactions are important to note, as total hedge fund interest fell by 2 funds heading into Q4.

Let’s also examine hedge fund activity in other stocks similar to The Rubicon Project Inc (NASDAQ:RUBI). We will take a look at The Chefs Warehouse, Inc (NASDAQ:CHEF), Purple Innovation, Inc. (NASDAQ:PRPL), Tivity Health, Inc. (NASDAQ:TVTY), and Intelligent Systems Corporation (NYSE:INS). This group of stocks’ market values are similar to RUBI’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CHEF 11 35478 4
PRPL 14 71224 1
TVTY 13 134787 -5
INS 9 62514 0
Average 11.75 76001 0

View table here if you experience formatting issues.

As you can see these stocks had an average of 11.75 hedge funds with bullish positions and the average amount invested in these stocks was $76 million. That figure was $50 million in RUBI’s case. Purple Innovation, Inc. (NASDAQ:PRPL) is the most popular stock in this table. On the other hand Intelligent Systems Corporation (NYSE:INS) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks The Rubicon Project Inc (NASDAQ:RUBI) is more popular among hedge funds. 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 returned 13.9% in 2020 through June 10th but still managed to beat the market by 14.2 percentage points. Hedge funds were also right about betting on RUBI as the stock returned 34.6% so far in Q2 (through June 10th) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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