Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4 years and analyze what the smart money thinks of Rocky Brands, Inc. (NASDAQ:RCKY) based on that data.
Rocky Brands, Inc. (NASDAQ:RCKY) has seen a decrease in hedge fund sentiment lately. RCKY was in 6 hedge funds’ portfolios at the end of September. There were 7 hedge funds in our database with RCKY positions at the end of the previous quarter. Our calculations also showed that RCKY isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most stock holders, hedge funds are viewed as underperforming, outdated financial vehicles of years past. While there are more than 8000 funds with their doors open at the moment, Our researchers hone in on the masters of this club, approximately 750 funds. These hedge fund managers have their hands on bulk of all hedge funds’ total capital, and by following their inimitable stock picks, Insider Monkey has unearthed a few investment strategies that have historically outstripped the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points per annum since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Jim Simons of Renaissance Technologies
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. With all of this in mind let’s go over the key hedge fund action encompassing Rocky Brands, Inc. (NASDAQ:RCKY).
Hedge fund activity in Rocky Brands, Inc. (NASDAQ:RCKY)
At the end of the third quarter, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards RCKY over the last 17 quarters. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies has the number one position in Rocky Brands, Inc. (NASDAQ:RCKY), worth close to $8.8 million, amounting to less than 0.1%% of its total 13F portfolio. On Renaissance Technologies’s heels is AQR Capital Management, led by Cliff Asness, holding a $3.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism consist of David Harding’s Winton Capital Management, Noam Gottesman’s GLG Partners and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. In terms of the portfolio weights assigned to each position Winton Capital Management allocated the biggest weight to Rocky Brands, Inc. (NASDAQ:RCKY), around 0.03% of its 13F portfolio. GLG Partners is also relatively very bullish on the stock, dishing out 0.01 percent of its 13F equity portfolio to RCKY.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Springbok Capital. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because none of the 750+ hedge funds tracked by Insider Monkey identified RCKY as a viable investment and initiated a position in the stock.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Rocky Brands, Inc. (NASDAQ:RCKY) but similarly valued. We will take a look at CECO Environmental Corp. (NASDAQ:CECE), LogicBio Therapeutics, Inc. (NASDAQ:LOGC), Pure Cycle Corporation (NASDAQ:PCYO), and eGain Communications Corporation (NASDAQ:EGAN). This group of stocks’ market caps match RCKY’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CECE | 9 | 44549 | -3 |
| LOGC | 6 | 106552 | 0 |
| PCYO | 7 | 84737 | 0 |
| EGAN | 10 | 28062 | -2 |
| Average | 8 | 65975 | -1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $66 million. That figure was $19 million in RCKY’s case. eGain Communications Corporation (NASDAQ:EGAN) is the most popular stock in this table. On the other hand LogicBio Therapeutics, Inc. (NASDAQ:LOGC) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Rocky Brands, Inc. (NASDAQ:RCKY) is even less popular than LOGC. Hedge funds dodged a bullet by taking a bearish stance towards RCKY. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately RCKY wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); RCKY investors were disappointed as the stock returned -16.1% during the fourth quarter (through the end of November) 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 70 percent of these stocks already outperformed the market so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
