Should You Buy RPC, Inc. (RES)?

Now, specific money managers have been driving this bullishness. Graham Capital Management, led by Kenneth Tropin, created the biggest position in RPC, Inc. (NYSE:RES). Graham Capital Management had $12.9 million invested in the company at the end of the quarter. Todd J. Kantor’s Encompass Capital Advisors also initiated a $11.3 million position during the quarter. The other funds with brand new RES positions are Vince Maddi and Shawn Brennan’s SIR Capital Management, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Michael Platt and William Reeves’ BlueCrest Capital Mgmt..

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as RPC, Inc. (NYSE:RES) but similarly valued. These stocks are National Instruments Corp (NASDAQ:NATI), PrivateBancorp Inc (NASDAQ:PVTB), American Capital Ltd. (NASDAQ:ACAS), and HEALTHSOUTH Corp. (NYSE:HLS). This group of stocks’ market values match RES’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NATI 24 372551 2
PVTB 23 551096 -3
ACAS 28 600404 -6
HLS 22 543448 -3

As you can see these stocks had an average of 24 funds with bullish positions and the average amount invested in these stocks was $517 million, compared to $317 million in RES’s case. American Capital Ltd. (NASDAQ:ACAS) is the most popular stock in this table, while HEALTHSOUTH Corp. (NYSE:HLS) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocks RPC, Inc. (NYSE:RES) has the same number of funds with long positions as HEALTHSOUTH Corp. (NYSE:HLS). Considering that hedge funds aren’t very 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