Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Follow Rti Surgical Inc. (NASDAQ:RTIX)
Follow Rti Surgical Inc. (NASDAQ:RTIX)
We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.
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Keeping this in mind, we’re going to check out the fresh action encompassing RTI Surgical Inc (NASDAQ:RTIX).
How have hedgies been trading RTI Surgical Inc (NASDAQ:RTIX)?
Heading into the fourth quarter of 2016, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, down by 7% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards RTIX 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 Insider Monkey’s hedge fund database, Gregory Summe’s Glen Capital Partners has the most valuable position in RTI Surgical Inc (NASDAQ:RTIX), worth close to $15.2 million, comprising 20.5% of its total 13F portfolio. Coming in second is Rock Springs Capital Management, led by Kris Jenner, Gordon Bussard, Graham McPhail, holding a $5.8 million position. Other peers that hold long positions consist of D. E. Shaw’s D E Shaw, Chuck Royce’s Royce & Associates and Jim Simons’ Renaissance Technologies. 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.
Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that cut their entire stakes in the stock during the third quarter. At the top of the heap, Dmitry Balyasny’s Balyasny Asset Management cut the biggest position of all the investors followed by Insider Monkey, worth about $0.2 million in stock. Ken Griffin’s fund, Citadel Investment Group, also said goodbye to its stock, about $0 million worth.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as RTI Surgical Inc (NASDAQ:RTIX) but similarly valued. We will take a look at First NBC Bank Holding Company (NASDAQ:FNBC), Skullcandy Inc (NASDAQ:SKUL), Codexis, Inc. (NASDAQ:CDXS), and FuelCell Energy, Inc. (NASDAQ:FCEL). This group of stocks’ market valuations match RTIX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FNBC | 12 | 19410 | 0 |
| SKUL | 10 | 3978 | -4 |
| CDXS | 5 | 34133 | 2 |
| FCEL | 3 | 7234 | -1 |
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 $16 million. That figure was $30 million in RTIX’s case. First NBC Bank Holding Company (NASDAQ:FNBC) is the most popular stock in this table. On the other hand FuelCell Energy, Inc. (NASDAQ:FCEL) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks RTI Surgical Inc (NASDAQ:RTIX) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None
