Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: RSP Permian Inc (NYSE:RSPP) .
RSP Permian Inc (NYSE:RSPP) investors should pay attention to an increase in support from the world’s most successful money managers during the third quarter. More specifically, 31 funds from our database held shares of the company at the end of September, compared to 26 funds a quarter earlier. At the end of this article we will also compare RSPP to other stocks including Bright Horizons Family Solutions Inc (NYSE:BFAM), Hudson Pacific Properties Inc (NYSE:HPP), and Fibria Celulose SA (ADR) (NYSE:FBR) to get a better sense of its popularity.
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
Keeping this in mind, we’re going to check out the fresh action regarding RSP Permian Inc (NYSE:RSPP).
How are hedge funds trading RSP Permian Inc (NYSE:RSPP)?
Heading into the fourth quarter of 2016, a total of 31 of the hedge funds tracked by Insider Monkey were long this stock, a change of 19% from the second quarter of 2016. By comparison, 23 hedge funds held shares or bullish call options in RSPP heading into 2016. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, John Labanowski’s Brenham Capital Management has the largest position in RSP Permian Inc (NYSE:RSPP), worth close to $124.1 million, accounting for 14.7% of its total 13F portfolio. The second most bullish fund is Ben Gambill’s Tiger Eye Capital, with a $22.3 million position; the fund has 2.8% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish consist of David Zusman’s Talara Capital Management and Kenneth Tropin’s Graham Capital Management. We should note that two of these hedge funds (Brenham Capital Management and Talara Capital Management) are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.