Range Resources Corp. (NYSE:RRC) investors should be aware of a decrease in enthusiasm from smart money lately.
To most shareholders, hedge funds are assumed to be slow, old financial tools of years past. While there are more than 8000 funds trading at the moment, we look at the moguls of this group, about 450 funds. It is estimated that this group controls most of all hedge funds’ total capital, and by paying attention to their top stock picks, we have uncovered a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Equally as key, positive insider trading sentiment is a second way to parse down the stock market universe. There are plenty of incentives for a bullish insider to downsize shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Several empirical studies have demonstrated the valuable potential of this strategy if piggybackers know what to do (learn more here).
Now, it’s important to take a peek at the recent action regarding Range Resources Corp. (NYSE:RRC).
How are hedge funds trading Range Resources Corp. (NYSE:RRC)?
Heading into 2013, a total of 29 of the hedge funds we track were bullish in this stock, a change of -6% from one quarter earlier. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were boosting their holdings meaningfully.
According to our comprehensive database, John Griffin’s Blue Ridge Capital had the most valuable position in Range Resources Corp. (NYSE:RRC), worth close to $208 million, comprising 2.9% of its total 13F portfolio. Coming in second is Alan Fournier of Pennant Capital Management, with a $110 million position; 1.5% of its 13F portfolio is allocated to the company. Some other hedgies that are bullish include Wallace Weitz’s Wallace R. Weitz & Co., Richard Chilton’s Chilton Investment Company and Andrew Hall’s Astenbeck Capital Management.
Since Range Resources Corp. (NYSE:RRC) has witnessed falling interest from the entirety of the hedge funds we track, it’s easy to see that there exists a select few money managers who were dropping their full holdings last quarter. At the top of the heap, Leon Cooperman’s Omega Advisors dropped the biggest investment of the 450+ funds we track, worth an estimated $38 million in stock. Donald Chiboucis’s fund, Columbus Circle Investors, also dropped its stock, about $29 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 2 funds last quarter.
How have insiders been trading Range Resources Corp. (NYSE:RRC)?
Insider trading activity, especially when it’s bullish, is best served when the company we’re looking at has experienced transactions within the past half-year. Over the last 180-day time period, Range Resources Corp. (NYSE:RRC) has experienced zero unique insiders purchasing, and 12 insider sales (see the details of insider trades here).
With the results exhibited by the aforementioned tactics, everyday investors must always pay attention to hedge fund and insider trading activity, and Range Resources Corp. (NYSE:RRC) shareholders fit into this picture quite nicely.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.