Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of RPC, Inc. (NYSE:RES).
Is RES a good stock to buy now? RPC, Inc. (NYSE:RES) has experienced a decrease in support from the world’s most elite money managers of late. RPC, Inc. (NYSE:RES) was in 14 hedge funds’ portfolios at the end of September. The all time high for this statistic is 30. Our calculations also showed that RES isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.
To the average investor there are dozens of metrics shareholders put to use to value their stock investments. A couple of the most underrated metrics are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the top picks of the best money managers can trounce the broader indices by a superb margin (see the details here).
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now let’s check out the fresh hedge fund action encompassing RPC, Inc. (NYSE:RES).
Do Hedge Funds Think RES Is A Good Stock To Buy Now?
At Q3’s end, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -13% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in RES over the last 21 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, GAMCO Investors held the most valuable stake in RPC, Inc. (NYSE:RES), which was worth $9 million at the end of the third quarter. On the second spot was Arrowstreet Capital which amassed $2.7 million worth of shares. Renaissance Technologies, Winton Capital Management, and Two Sigma Advisors 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 Algert Coldiron Investors allocated the biggest weight to RPC, Inc. (NYSE:RES), around 0.24% of its 13F portfolio. GAMCO Investors is also relatively very bullish on the stock, designating 0.1 percent of its 13F equity portfolio to RES.
Due to the fact that RPC, Inc. (NYSE:RES) has faced a decline in interest from the entirety of the hedge funds we track, it’s safe to say that there is a sect of funds who sold off their entire stakes in the third quarter. Interestingly, Michael Gelband’s ExodusPoint Capital dropped the biggest investment of the “upper crust” of funds tracked by Insider Monkey, totaling about $0.6 million in stock. Murray Stahl’s fund, Horizon Asset Management, also dropped its stock, about $0.2 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 2 funds in the third quarter.
Let’s go over hedge fund activity in other stocks similar to RPC, Inc. (NYSE:RES). We will take a look at Kraton Corporation (NYSE:KRA), Merchants Bancorp (NASDAQ:MBIN), Loral Space & Communications Inc (NASDAQ:LORL), Anterix Inc. (NASDAQ:ATEX), Tutor Perini Corp (NYSE:TPC), Tenneco Inc (NYSE:TEN), and Avita Medical Limited (NASDAQ:RCEL). This group of stocks’ market values are similar to RES’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.4 hedge funds with bullish positions and the average amount invested in these stocks was $108 million. That figure was $18 million in RES’s case. Loral Space & Communications Inc (NASDAQ:LORL) is the most popular stock in this table. On the other hand Avita Medical Limited (NASDAQ:RCEL) is the least popular one with only 5 bullish hedge fund positions. RPC, Inc. (NYSE:RES) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for RES is 45.1. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on RES as the stock returned 38.3% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.