Hedge Funds Are Crazy About Reading International, Inc. (RDI)

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Reading International, Inc. (NASDAQ:RDI) .

Reading International, Inc. (NASDAQ:RDI) investors should pay attention to an increase in hedge fund sentiment lately. RDI was in 7 hedge funds’ portfolios at the end of the third quarter of 2016. There were 4 hedge funds in our database with RDI positions at the end of the previous quarter. At the end of this article we will also compare RDI to other stocks including Aralez Pharmaceuticals Inc (NASDAQ:ARLZ), City Office REIT Inc (NYSE:CIO), and Lionbridge Technologies, Inc. (NASDAQ:LIOX) 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.

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Keeping this in mind, we’re going to analyze the recent action regarding Reading International, Inc. (NASDAQ:RDI).

How are hedge funds trading Reading International, Inc. (NASDAQ:RDI)?

At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, growth of 75% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards RDI over the last 5 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, one of the largest hedge funds in the world, holds the most valuable position in Reading International, Inc. (NASDAQ:RDI). Renaissance Technologies has a $13.6 million position in the stock, comprising less than 0.1% of its 13F portfolio. Sitting at the No. 2 spot is GAMCO Investors, led by Mario Gabelli, holding a $0.5 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other peers with similar optimism comprise Matthew Hulsizer’s PEAK6 Capital Management, Donald Yacktman’s Yacktman Asset Management and Israel Englander’s Millennium Management. We should note that none of these hedge funds 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.

With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Yacktman Asset Management established the most valuable position in Reading International, Inc. (NASDAQ:RDI). Yacktman Asset Management had $0.2 million invested in the company at the end of the quarter. Millennium Management also initiated a $0.2 million position during the quarter. The only other fund with a brand new RDI position is Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.

Let’s now take a look at hedge fund activity in other stocks similar to Reading International, Inc. (NASDAQ:RDI). These stocks are Aralez Pharmaceuticals Inc (NASDAQ:ARLZ), City Office REIT Inc (NYSE:CIO), Lionbridge Technologies, Inc. (NASDAQ:LIOX), and Novan Inc (NASDAQ:NOVN). This group of stocks’ market valuations are similar to RDI’s market valuation.

As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $51 million. That figure was $15 million in RDI’s case. Aralez Pharmaceuticals Inc (NASDAQ:ARLZ) is the most popular stock in this table. On the other hand Novan Inc (NASDAQ:NOVN) is the least popular one with only 5 bullish hedge fund positions. Reading International, Inc. (NASDAQ:RDI) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ARLZ might be a better candidate to consider taking a long position in.

Disclosure: None