Is Rogers Corporation (NYSE:ROG) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is ROG a good stock to buy now? The smart money was in a bullish mood. The number of long hedge fund bets rose by 6 lately. Rogers Corporation (NYSE:ROG) was in 19 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 21. Our calculations also showed that ROG 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). There were 13 hedge funds in our database with ROG holdings at the end of June.
Video: Watch our video about the top 5 most popular hedge fund stocks.
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 monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
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 we’re going to take a look at the fresh hedge fund action surrounding Rogers Corporation (NYSE:ROG).
Do Hedge Funds Think ROG Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 46% from the second quarter of 2020. By comparison, 21 hedge funds held shares or bullish call options in ROG a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Rogers Corporation (NYSE:ROG) was held by Royce & Associates, which reported holding $34.4 million worth of stock at the end of September. It was followed by ACK Asset Management with a $17.1 million position. Other investors bullish on the company included Fisher Asset Management, Citadel Investment Group, and Renaissance Technologies. In terms of the portfolio weights assigned to each position ACK Asset Management allocated the biggest weight to Rogers Corporation (NYSE:ROG), around 8.81% of its 13F portfolio. Skylands Capital is also relatively very bullish on the stock, designating 0.52 percent of its 13F equity portfolio to ROG.
As one would reasonably expect, some big names have been driving this bullishness. GLG Partners, managed by Noam Gottesman, established the most outsized position in Rogers Corporation (NYSE:ROG). GLG Partners had $2 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also made a $1.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Paul Tudor Jones’s Tudor Investment Corp, Greg Eisner’s Engineers Gate Manager, and Benjamin A. Smith’s Laurion Capital Management.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Rogers Corporation (NYSE:ROG) but similarly valued. We will take a look at Prestige Consumer Healthcare Inc. (NYSE:PBH), GrafTech International Ltd. (NYSE:EAF), TC Pipelines, LP (NYSE:TCP), Cubic Corporation (NYSE:CUB), PRA Group, Inc. (NASDAQ:PRAA), SPX FLOW, Inc. (NYSE:FLOW), and Yext, Inc. (NYSE:YEXT). This group of stocks’ market caps resemble ROG’s market cap.
|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 15.4 hedge funds with bullish positions and the average amount invested in these stocks was $89 million. That figure was $94 million in ROG’s case. GrafTech International Ltd. (NYSE:EAF) is the most popular stock in this table. On the other hand TC Pipelines, LP (NYSE:TCP) is the least popular one with only 3 bullish hedge fund positions. Rogers Corporation (NYSE:ROG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ROG is 71.9. 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 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on ROG as the stock returned 54.2% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.