Rock-Tenn Company (NYSE:RKT) was in 24 hedge funds’ portfolio at the end of December. RKT shareholders have witnessed a decrease in hedge fund sentiment of late. There were 29 hedge funds in our database with RKT positions at the end of the previous quarter.
To most traders, hedge funds are perceived as worthless, outdated financial vehicles of years past. While there are over 8000 funds in operation today, we choose to focus on the upper echelon of this group, about 450 funds. It is estimated that this group controls the lion’s share of the hedge fund industry’s total capital, and by keeping an eye on their highest performing stock picks, we have figured out a number of investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum 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 beaten the S&P 500 index by 25 percentage points in 6.5 month (see the details here).
Equally as key, positive insider trading activity is another way to break down the world of equities. Obviously, there are lots of incentives for a corporate insider to sell shares of his or her company, but only one, very obvious reason why they would buy. Several empirical studies have demonstrated the market-beating potential of this strategy if piggybackers know what to do (learn more here).
With all of this in mind, it’s important to take a peek at the key action encompassing Rock-Tenn Company (NYSE:RKT).
Hedge fund activity in Rock-Tenn Company (NYSE:RKT)
In preparation for this year, a total of 24 of the hedge funds we track held long positions in this stock, a change of -17% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings significantly.
Of the funds we track, John Paulson’s Paulson & Co had the most valuable position in Rock-Tenn Company (NYSE:RKT), worth close to $112 million, comprising 0.7% of its total 13F portfolio. Coming in second is Ken Heebner of Capital Growth Management, with a $89 million position; the fund has 2.3% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Eric Bannasch’s Cadian Capital, Thomas E. Claugus’s GMT Capital and John Burbank’s Passport Capital.
Seeing as Rock-Tenn Company (NYSE:RKT) has faced declining sentiment from the smart money, we can see that there were a few funds who sold off their positions entirely in Q4. Intriguingly, Alexander Mitchell’s Scopus Asset Management dumped the largest position of all the hedgies we key on, valued at an estimated $23 million in stock., and Donald Chiboucis of Columbus Circle Investors was right behind this move, as the fund said goodbye to about $15 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 5 funds in Q4.
What do corporate executives and insiders think about Rock-Tenn Company (NYSE:RKT)?
Bullish insider trading is most useful when the company we’re looking at has seen transactions within the past half-year. Over the last six-month time frame, Rock-Tenn Company (NYSE:RKT) has seen 1 unique insiders purchasing, and 7 insider sales (see the details of insider trades here).
With the results shown by Insider Monkey’s tactics, retail investors should always monitor hedge fund and insider trading sentiment, and Rock-Tenn Company (NYSE:RKT) is no exception.
Click here to learn more about Insider Monkey’s Hedge Fund Newsletter
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.
