Hedge Fund Sentiment Is Stagnant On RenaissanceRe Holdings Ltd. (RNR)

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. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article we look at what those investors think of RenaissanceRe Holdings Ltd. (NYSE:RNR).

RenaissanceRe Holdings Ltd. (NYSE:RNR) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 31 hedge funds’ portfolios at the end of September. Our calculations also showed that RNR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Brixmor Property Group Inc (NYSE:BRX), Skechers USA Inc (NYSE:SKX), and Planet Fitness Inc (NYSE:PLNT) to gather more data points.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we’re going to take a look at the latest hedge fund action regarding RenaissanceRe Holdings Ltd. (NYSE:RNR).

Chuck Royce of Royce & Associates

Do Hedge Funds Think RNR Is A Good Stock To Buy Now?

At the end of September, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. By comparison, 37 hedge funds held shares or bullish call options in RNR a year ago. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

More specifically, Southeastern Asset Management was the largest shareholder of RenaissanceRe Holdings Ltd. (NYSE:RNR), with a stake worth $126.7 million reported as of the end of September. Trailing Southeastern Asset Management was Polar Capital, which amassed a stake valued at $125.4 million. Abrams Bison Investments, AQR 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 BlueMar Capital Management allocated the biggest weight to RenaissanceRe Holdings Ltd. (NYSE:RNR), around 5.25% of its 13F portfolio. Soapstone Capital is also relatively very bullish on the stock, designating 3.44 percent of its 13F equity portfolio to RNR.

Seeing as RenaissanceRe Holdings Ltd. (NYSE:RNR) has witnessed declining sentiment from hedge fund managers, we can see that there exists a select few hedgies who sold off their entire stakes in the third quarter. At the top of the heap, Matthew Stadelman’s Diamond Hill Capital dropped the biggest investment of the 750 funds monitored by Insider Monkey, valued at close to $56.3 million in stock, and Israel Englander’s Millennium Management was right behind this move, as the fund dumped about $18.2 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as RenaissanceRe Holdings Ltd. (NYSE:RNR) but similarly valued. We will take a look at Brixmor Property Group Inc (NYSE:BRX), Skechers USA Inc (NYSE:SKX), Planet Fitness Inc (NYSE:PLNT), Change Healthcare Inc. (NASDAQ:CHNG), Arrowhead Pharmaceuticals Inc. (NASDAQ:ARWR), Virgin Galactic Holdings, Inc. (NYSE:SPCE), and Varonis Systems Inc (NASDAQ:VRNS). This group of stocks’ market values are similar to RNR’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 30.9 hedge funds with bullish positions and the average amount invested in these stocks was $660 million. That figure was $474 million in RNR’s case. Change Healthcare Inc. (NASDAQ:CHNG) is the most popular stock in this table. On the other hand Virgin Galactic Holdings, Inc. (NYSE:SPCE) is the least popular one with only 16 bullish hedge fund positions. RenaissanceRe Holdings Ltd. (NYSE:RNR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for RNR is 49.7. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Hedge funds were also right about betting on RNR as the stock returned 10.6% since the end of Q3 (through 11/30) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.