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Is Sturm, Ruger & Company (RGR) Going to Burn These Hedge Funds?

With a general bullishness amongst the heavyweights, specific money managers were leading the bulls’ herd. Tide Point Capital created the most outsized position in Sturm, Ruger & Company (NYSE:RGR). Renaissance Technologies also initiated a $2.8 million position during the quarter. The other funds with brand new RGR positions are Matthew Tewksbury’s Stevens Capital Management, Paul Tudor Jones’ Tudor Investment Corp, and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Sturm, Ruger & Company (NYSE:RGR) but similarly valued. We will take a look at Forum Energy Technologies Inc (NYSE:FET), Forward Pharma A/S (NASDAQ:FWP), Insperity Inc (NYSE:NSP), and Actuant Corporation (NYSE:ATU). This group of stocks’ market values are closest to RGR’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FET 12 41559 -7
FWP 11 218134 -3
NSP 25 335811 1
ATU 14 194833 -6

As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $198 million. That figure was just $31 million in RGR’s case. Insperity Inc (NYSE:NSP) is the most popular stock in this table. On the other hand Forward Pharma A/S (NASDAQ:FWP) is the least popular one with only 11 bullish hedge fund positions. Sturm, Ruger & Company (NYSE:RGR) 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 NSP might be a better candidate to consider a long position.

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