The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 817 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2020. What do these smart investors think about Ring Energy Inc (NYSE:REI)?
Is Ring Energy Inc (NYSE:REI) the right investment to pursue these days? Money managers were becoming less confident. The number of bullish hedge fund positions fell by 2 recently. Ring Energy Inc (NYSE:REI) was in 7 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 13. Our calculations also showed that REI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 9 hedge funds in our database with REI positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are many tools stock traders have at their disposal to analyze publicly traded companies. Two of the most useful tools are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the best hedge fund managers can outperform the market by a healthy amount (see the details here).
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind let’s take a peek at the latest hedge fund action encompassing Ring Energy Inc (NYSE:REI).
What have hedge funds been doing with Ring Energy Inc (NYSE:REI)?
At third quarter’s end, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -22% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards REI over the last 21 quarters. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
More specifically, Millennium Management was the largest shareholder of Ring Energy Inc (NYSE:REI), with a stake worth $1.1 million reported as of the end of September. Trailing Millennium Management was Arrowstreet Capital, which amassed a stake valued at $0.3 million. Winton Capital Management, Laurion Capital Management, and Royce & Associates were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Winton Capital Management allocated the biggest weight to Ring Energy Inc (NYSE:REI), around 0.0033% of its 13F portfolio. Millennium Management is also relatively very bullish on the stock, earmarking 0.0013 percent of its 13F equity portfolio to REI.
Since Ring Energy Inc (NYSE:REI) has experienced declining sentiment from the smart money, it’s easy to see that there were a few hedge funds who were dropping their positions entirely in the third quarter. At the top of the heap, Donald Sussman’s Paloma Partners cut the largest stake of the “upper crust” of funds followed by Insider Monkey, comprising about $0.2 million in stock. Michael Gelband’s fund, ExodusPoint Capital, also said goodbye to its stock, about $0.1 million worth. These moves are interesting, as total hedge fund interest dropped by 2 funds in the third quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Ring Energy Inc (NYSE:REI) but similarly valued. We will take a look at Perma-Pipe International Holdings, Inc. (NASDAQ:PPIH), Delcath Systems, Inc. (NASDAQ:DCTH), Espey Manufacturing & Electronics Corp. (NYSE:ESP), Strata Skin Sciences, Inc. (NASDAQ:SSKN), AMREP Corporation (NYSE:AXR), Trinity Place Holdings Inc. (NYSE:TPHS), and 1895 Bancorp of Wisconsin, Inc. (NASDAQ:BCOW). This group of stocks’ market caps are similar to REI’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 2.6 hedge funds with bullish positions and the average amount invested in these stocks was $6 million. That figure was $2 million in REI’s case. Trinity Place Holdings Inc. (NYSE:TPHS) is the most popular stock in this table. On the other hand Espey Manufacturing & Electronics Corp. (NYSE:ESP) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Ring Energy Inc (NYSE:REI) is more popular among hedge funds. Our overall hedge fund sentiment score for REI is 69.2. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 31.6% in 2020 through December 2nd and still beat the market by 16 percentage points. Unfortunately REI wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on REI were disappointed as the stock returned -2.9% since the end of the third quarter (through 12/2) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.