RPC, Inc. (RES): Are Hedge Funds Right About This Stock?

Page 1 of 2

Now, according to many of your fellow readers, hedge funds are seen as delayed, old investment tools of a forgotten age. Although there are more than 8,000 hedge funds with their doors open in present day, Insider Monkey aim at the elite of this group, around 525 funds. It is assumed that this group oversees the majority of all hedge funds’ total assets, and by paying attention to their best stock picks, we’ve deciphered a number of investment strategies that have historically outpaced the S&P 500. 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 began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).

Just as crucial, bullish insider trading sentiment is another way to look at the marketplace. Obviously, there are plenty of motivations for a corporate insider to get rid of shares of his or her company, but just one, very obvious reason why they would behave bullishly. Several academic studies have demonstrated the useful potential of this method if piggybackers know where to look (learn more here).

What’s more, let’s discuss the recent info about RPC, Inc. (NYSE:RES).

What have hedge funds been doing with RPC, Inc. (NYSE:RES)?

At the end of the second quarter, a total of 13 of the hedge funds we track were bullish in this stock, a change of -19% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes meaningfully.

RPC, Inc. (NYSE:RES)According to our 13F database, Mario Gabelli’s GAMCO Investors had the most valuable position in RPC, Inc. (NYSE:RES), worth close to $93 million, accounting for 0.6% of its total 13F portfolio. Sitting at the No. 2 spot is Royce & Associates, managed by Chuck Royce, which held a $21.8 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include Joel Greenblatt’s Gotham Asset Management, Steven Cohen’s SAC Capital Advisors and Cliff Asness’s AQR Capital Management.

Due to the fact RPC, Inc. (NYSE:RES) has witnessed bearish sentiment from the smart money’s best and brightest, it’s easy to see that there was a specific group of hedge funds who sold off their entire stakes last quarter. Interestingly, John Overdeck and David Siegel’s Two Sigma Advisors dropped the largest investment of all the hedgies we watch, comprising close to $0.7 million in stock. Matthew Tewksbury’s fund, Stevens Capital Management, also dumped its stock, about $0.4 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 3 funds last quarter.

What have insiders been doing with RPC, Inc. (NYSE:RES)?

Insider buying made by high-level executives is most useful when the primary stock in question has seen transactions within the past six months. Over the last half-year time frame, RPC, Inc. (NYSE:RES) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll check out the relationship between both of these indicators in other stocks similar to RPC, Inc. (NYSE:RES). These stocks are Oil States International, Inc. (NYSE:OIS), Precision Drilling Corp (USA) (NYSE:PDS), Forum Energy Technologies Inc (NYSE:FET), Superior Energy Services, Inc. (NYSE:SPN), and Dril-Quip, Inc. (NYSE:DRQ). This group of stocks are the members of the oil & gas equipment & services industry and their market caps are similar to RES’s market cap.

Page 1 of 2