Retail Opportunity Investments Corp (ROIC): Are Hedge Funds Right About This Stock?

As one would reasonably expect, key hedge funds have been driving this bullishness. Navellier & Associates, led by Louis Navellier, established the largest position in Retail Opportunity Investments Corp (NASDAQ:ROIC). Navellier & Associates had $0.9 million invested in the company at the end of the quarter. Jim Simons’ Renaissance Technologies also made a $0.5 million investment in the stock during the quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Retail Opportunity Investments Corp (NASDAQ:ROIC) but similarly valued. We will take a look at Weibo Corp (ADR) (NASDAQ:WB), Media General, Inc. (NYSE:MEG), Northstar Realty Finance Corp. (NYSE:NRF), and Verint Systems Inc. (NASDAQ:VRNT). This group of stocks’ market valuations are similar to ROIC’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
WB 29 201128 17
MEG 31 750847 -3
NRF 32 315398 0
VRNT 21 294430 0

As you can see these stocks had an average of 28 hedge funds with bullish positions and the average amount invested in these stocks was $390 million. That figure was $26 million in ROIC’s case. Northstar Realty Finance Corp. (NYSE:NRF) is the most popular stock in this table. On the other hand Verint Systems Inc. (NASDAQ:VRNT) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks Retail Opportunity Investments Corp (NASDAQ:ROIC) is even less popular than VRNT. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

Disclosure: None