Hedge Funds Are Buying The Rubicon Project Inc (RUBI)

At Insider Monkey we follow around 730 of the best-performing investors and even though many of them lost money in the last several months, the history teaches us that over the long-run they still manage to beat the market, which is why it can be profitable for us to imitate their activity. Of course, even the best money managers can sometimes get it wrong, but following some of their picks gives us a better chance to outperform the crowd than picking a random stock and this is where our research comes in.

The Rubicon Project Inc (NYSE:RUBI) shareholders have witnessed an increase in hedge fund sentiment recently. RUBI was in 19 hedge funds’ portfolios at the end of September. There were 17 hedge funds in our database with RUBI holdings at the end of the previous quarter. At the end of this article we will also compare RUBI to other stocks including Constellium NV (NYSE:CSTM), Wstrn Ast Clymr Infltn Lkd Opts & Inc Fd (NYSE:WIW), and Orthofix International NV (NASDAQ:OFIX) to get a better sense of its popularity.

In the 21st century investor’s toolkit there are a lot of tools investors put to use to evaluate their holdings. Some of the most innovative tools are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the top hedge fund managers can trounce their index-focused peers by a healthy margin (see the details here).

With all of this in mind, we’re going to go over the new action surrounding The Rubicon Project Inc (NYSE:RUBI).

How have hedgies been trading The Rubicon Project Inc (NYSE:RUBI)?

Heading into Q4, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 12% from the second quarter. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their stakes substantially (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, 40 North Management, managed by David S. Winter and David J. Millstone, holds the biggest position in The Rubicon Project Inc (NYSE:RUBI). 40 North Management has a $16.3 million position in the stock, comprising 1.2% of its 13F portfolio. Coming in second is ShearLink Capital, managed by Vivek Mehta and Aaron Husock, which holds a $15.6 million position; the fund has 6.9% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish, encompass Chuck Royce’s Royce & Associates and Jim Simons’ Renaissance Technologies.

As one would reasonably expect, key money managers have been driving this bullishness. Columbus Circle Investors, managed by Clifford Fox, initiated the largest position in The Rubicon Project Inc (NYSE:RUBI). Columbus Circle Investors had $5.6 million invested in the company at the end of the quarter. Christopher Zepf and Brian Thonn’s Kingdom Ridge Capital also initiated a $4.5 million position during the quarter. The other funds with brand new RUBI positions are Ken Fisher’s Fisher Asset Management, Chao Ku’s Nine Chapters Capital Management, and Adam Usdan’s Trellus Management Company.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as The Rubicon Project Inc (NYSE:RUBI) but similarly valued. We will take a look at Constellium NV (NYSE:CSTM), Wstrn Ast Clymr Infltn Lkd Opts & Inc Fd (NYSE:WIW), Orthofix International NV (NASDAQ:OFIX), and Osiris Therapeutics, Inc. (NASDAQ:OSIR). All of these stocks’ market caps are similar to RUBI’s market cap.

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $123 million, above the $71 million figure in RUBI’s case. Constellium NV (NYSE:CSTM) is the most popular stock in this table, while Wstrn Ast Clymr Infltn Lkd Opts & Inc Fd (NYSE:WIW) is the least popular one with only 4 bullish hedge fund positions. The Rubicon Project Inc (NYSE:RUBI) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard CSTM might be a better candidate to consider a long position.