The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Regal Beloit Corporation (NYSE:RBC).
Regal Beloit Corporation (NYSE:RBC) was in 18 hedge funds’ portfolios at the end of the third quarter of 2019. RBC has seen an increase in enthusiasm from smart money recently. There were 17 hedge funds in our database with RBC holdings at the end of the previous quarter. Our calculations also showed that RBC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Paul Marshall of Marshall Wace
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to analyze the recent hedge fund action regarding Regal Beloit Corporation (NYSE:RBC).
What does smart money think about Regal Beloit Corporation (NYSE:RBC)?
At Q3’s end, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards RBC over the last 17 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, AQR Capital Management was the largest shareholder of Regal Beloit Corporation (NYSE:RBC), with a stake worth $77.1 million reported as of the end of September. Trailing AQR Capital Management was Fisher Asset Management, which amassed a stake valued at $54.2 million. Arrowstreet Capital, Millennium Management, and Marshall Wace 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 Prospector Partners allocated the biggest weight to Regal Beloit Corporation (NYSE:RBC), around 0.53% of its 13F portfolio. Polaris Capital Management is also relatively very bullish on the stock, dishing out 0.13 percent of its 13F equity portfolio to RBC.
As industrywide interest jumped, key hedge funds have jumped into Regal Beloit Corporation (NYSE:RBC) headfirst. Tudor Investment Corp, managed by Paul Tudor Jones, initiated the largest position in Regal Beloit Corporation (NYSE:RBC). Tudor Investment Corp had $1.2 million invested in the company at the end of the quarter. Brandon Haley’s Holocene Advisors also made a $0.8 million investment in the stock during the quarter. The only other fund with a brand new RBC position is David Harding’s Winton Capital Management.
Let’s check out hedge fund activity in other stocks similar to Regal Beloit Corporation (NYSE:RBC). We will take a look at South Jersey Industries Inc (NYSE:SJI), Hamilton Lane Incorporated (NASDAQ:HLNE), Steven Madden, Ltd. (NASDAQ:SHOO), and New Fortress Energy LLC (NASDAQ:NFE). All of these stocks’ market caps are closest to RBC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SJI | 12 | 64716 | -1 |
| HLNE | 14 | 98910 | 8 |
| SHOO | 17 | 45054 | 3 |
| NFE | 4 | 30975 | -1 |
| Average | 11.75 | 59914 | 2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.75 hedge funds with bullish positions and the average amount invested in these stocks was $60 million. That figure was $206 million in RBC’s case. Steven Madden, Ltd. (NASDAQ:SHOO) is the most popular stock in this table. On the other hand New Fortress Energy LLC (NASDAQ:NFE) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Regal Beloit Corporation (NYSE:RBC) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on RBC as the stock returned 12.2% during the first two months of Q4 and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.
