Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Revlon Inc (NYSE:REV).
Is Revlon Inc (NYSE:REV) a good investment today? Money managers were in a pessimistic mood. The number of bullish hedge fund positions were trimmed by 11 lately. Revlon Inc (NYSE:REV) was in 31 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 42. Our calculations also showed that REV isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 42 hedge funds in our database with REV positions at the end of the second quarter.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind let’s analyze the fresh hedge fund action surrounding Revlon Inc (NYSE:REV).
Peter Algert of Algert Global
Do Hedge Funds Think REV Is A Good Stock To Buy Now?
At Q3’s end, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -26% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards REV over the last 25 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Pzena Investment Management held the most valuable stake in Revlon Inc (NYSE:REV), which was worth $62.2 million at the end of the third quarter. On the second spot was Sunriver Management which amassed $51 million worth of shares. SQN Investors, Point72 Asset Management, and Praesidium Investment Management Company were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position SCW Capital Management allocated the biggest weight to Revlon Inc (NYSE:REV), around 14.2% of its 13F portfolio. Sunriver Management is also relatively very bullish on the stock, designating 8.11 percent of its 13F equity portfolio to REV.
Since Revlon Inc (NYSE:REV) has experienced bearish sentiment from the smart money, it’s easy to see that there exists a select few money managers that slashed their full holdings heading into Q4. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital said goodbye to the biggest stake of the “upper crust” of funds monitored by Insider Monkey, comprising an estimated $4.9 million in stock, and Lawrence Hawkins’s Prosight Capital was right behind this move, as the fund said goodbye to about $3.8 million worth. These moves are important to note, as aggregate hedge fund interest fell by 11 funds heading into Q4.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Revlon Inc (NYSE:REV) but similarly valued. We will take a look at EverQuote, Inc. (NASDAQ:EVER), INDUS Realty Trust, Inc. (NASDAQ:INDT), Universal Logistics Holdings, Inc. (NASDAQ:ULH), Centrus Energy Corp. (NYSE:LEU), Zenvia Inc. (NASDAQ:ZENV), Vaccitech plc (NASDAQ:VACC), and Beazer Homes USA, Inc. (NYSE:BZH). This group of stocks’ market caps resemble REV’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EVER | 17 | 56099 | 4 |
| INDT | 7 | 95774 | -1 |
| ULH | 10 | 26116 | -1 |
| LEU | 2 | 14187 | -1 |
| ZENV | 8 | 13265 | 8 |
| VACC | 4 | 10713 | 0 |
| BZH | 14 | 43769 | 0 |
| Average | 8.9 | 37132 | 1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.9 hedge funds with bullish positions and the average amount invested in these stocks was $37 million. That figure was $437 million in REV’s case. EverQuote, Inc. (NASDAQ:EVER) is the most popular stock in this table. On the other hand Centrus Energy Corp. (NYSE:LEU) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Revlon Inc (NYSE:REV) is more popular among hedge funds. Our overall hedge fund sentiment score for REV is 66.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks returned 28.6% in 2021 through November 30th but still managed to beat the market by 5.6 percentage points. Hedge funds were also right about betting on REV as the stock returned 12.5% since the end of September (through 11/30) 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.
