How Renasant Corp. (RNST) Stacks Up Against Its Peers

The successful funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at Renasant Corp. (NASDAQ:RNST) from the perspective of those successful funds.

Is Renasant Corp. (NASDAQ:RNST) a buy at the moment? Investors who are in the know are actually turning less bullish. The number of long hedge fund bets that are revealed through 13F filings retreated by 2 recently. 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 First Interstate Bancsystem Inc (NASDAQ:FIBK), Restoration Hardware Holdings Inc (NYSE:RH), and The Navigators Group, Inc (NASDAQ:NAVG) to gather more data points.

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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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How have hedgies been trading Renasant Corp. (NASDAQ:RNST)?

Heading into the fourth quarter of 2016, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a drop of 18% from one quarter earlier. By comparison, 7 hedge funds held shares or bullish call options in RNST heading into this year, which is still up by 2 in 2016. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

HedgeFund

Of the funds tracked by Insider Monkey, Renaissance Technologies, one of the biggest hedge funds in the world, holds the most valuable position in Renasant Corp. (NASDAQ:RNST). Renaissance Technologies has a $26.7 million position in the stock. On Renaissance Technologies’ heels is Balyasny Asset Management, led by Dmitry Balyasny, which holds a $4.5 million position. Other professional money managers that hold long positions contain Ken Fisher’s Fisher Asset Management, Israel Englander’s Millennium Management, and John Overdeck and David Siegel’s Two Sigma Advisors. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds, which is based on the performance of their 13F long positions in non-micro-cap stocks.

We already know that not all hedge funds are bullish on the stock and some hedge funds actually dumped their positions entirely. At the top of the heap, Paul Hondros’ AlphaOne Capital Partners dumped the biggest investment of all the hedgies monitored by Insider Monkey, valued at an estimated $4.1 million in stock, and Ira Unschuld’s Brant Point Investment Management was right behind this move, as the fund sold off about $1.8 million worth of shares.

Let’s also examine hedge fund activity in other stocks similar to Renasant Corp. (NASDAQ:RNST). These stocks are First Interstate Bancsystem Inc (NASDAQ:FIBK), Restoration Hardware Holdings Inc (NYSE:RH), The Navigators Group, Inc (NASDAQ:NAVG), and Provident Financial Services, Inc. (NYSE:PFS). This group of stocks’ market values are closest to RNST’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FIBK 7 31293 2
RH 34 407182 10
NAVG 14 125833 3
PFS 5 21749 1

As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $147 million. That figure was $39 million in RNST’s case. Restoration Hardware Holdings Inc (NYSE:RH) is the most popular stock in this table. On the other hand Provident Financial Services, Inc. (NYSE:PFS) is the least popular one with only 5 bullish hedge fund positions. Renasant Corp. (NASDAQ:RNST) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard RH might be a better candidate to consider taking a long position in.

Disclosure: None