Hedge Funds Are Dumping RBC Bearings Incorporated (ROLL)

With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was RBC Bearings Incorporated (NASDAQ:ROLL).

RBC Bearings Incorporated (NASDAQ:ROLL) was in an 8 hedge funds’ portfolios at the end of the third quarter of 2015. ROLL has experienced a decrease in support from the world’s most elite money managers recently. There were 13 hedge funds in our database with ROLL positions at the end of the previous quarter. 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 Capital Bank Financial Corp (NASDAQ:CBF), Headwaters Inc (NYSE:HW), and ClubCorp Holdings Inc (NYSE:MYCC) to gather more data points.

At the moment there are a large number of tools stock market investors can use to size up stocks. Some of the less known tools are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the top picks of the best money managers can outpace the market by a healthy margin (see the details here).

With all of this in mind, we’re going to check out the new action regarding RBC Bearings Incorporated (NASDAQ:ROLL).

How are hedge funds trading RBC Bearings Incorporated (NASDAQ:ROLL)?

At the end of the third quarter, a total of an 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -38% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Royce & Associates, managed by Chuck Royce, holds the biggest position in RBC Bearings Incorporated (NASDAQ:ROLL). Royce & Associates has a $62.6 million position in the stock, comprising 0.3% of its 13F portfolio. The second most bullish fund is Jim Simons’ Renaissance Technologies, with a $7.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. The remaining members of the smart money that are bullish contain Alexander Mitchell’s Scopus Asset Management, Ken Griffin’s Citadel Investment Group and D. E. Shaw’s D E Shaw.

Since RBC Bearings Incorporated (NASDAQ:ROLL) has witnessed falling interest from the entirety of the hedge funds we track, it’s safe to say that there were a few money managers that elected to cut their positions entirely in the third quarter. Intriguingly, Joel Greenblatt’s Gotham Asset Management dropped the biggest stake of the 700 funds monitored by Insider Monkey, comprising close to $4.2 million in stock, and Peter Muller’s PDT Partners was right behind this move, as the fund dumped about $0.5 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 5 funds in the third quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as RBC Bearings Incorporated (NASDAQ:ROLL) but similarly valued. These stocks are Capital Bank Financial Corp (NASDAQ:CBF), Headwaters Inc (NYSE:HW), ClubCorp Holdings Inc (NYSE:MYCC), and Park National Corporation (NYSEAMEX:PRK). All of these stocks’ market caps resemble ROLL’s market cap.

As you can see these stocks had an average of 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $110 million. That figure was $79 million in ROLL’s case. Headwaters Inc (NYSE:HW) is the most popular stock in this table. On the other hand Capital Bank Financial Corp (NASDAQ:CBF) is the least popular one with only 5 bullish hedge fund positions. RBC Bearings Incorporated (NASDAQ:ROLL) 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 HW might be a better candidate to consider a long position.