Hedge Funds Aren’t Crazy About Rent-A-Center Inc (RCII) Anymore

Rent-A-Center Inc (NASDAQ:RCII) shareholders have witnessed a decrease in support from the world’s most elite money managers of late.

In the financial world, there are many gauges shareholders can use to analyze Mr. Market. A couple of the best are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top money managers can outclass the broader indices by a healthy margin (see just how much).

Just as key, positive insider trading sentiment is another way to parse down the financial markets. Just as you’d expect, there are a variety of reasons for a corporate insider to downsize shares of his or her company, but just one, very obvious reason why they would behave bullishly. Many empirical studies have demonstrated the valuable potential of this tactic if shareholders know where to look (learn more here).

With these “truths” under our belt, we’re going to take a peek at the recent action regarding Rent-A-Center Inc (NASDAQ:RCII).

What does the smart money think about Rent-A-Center Inc (NASDAQ:RCII)?

Heading into Q2, a total of 11 of the hedge funds we track held long positions in this stock, a change of -39% from the first quarter. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes substantially.

When looking at the hedgies we track, Adage Capital Management, managed by Phill Gross and Robert Atchinson, holds the largest position in Rent-A-Center Inc (NASDAQ:RCII). Adage Capital Management has a $25.9 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Pzena Investment Management, managed by Richard S. Pzena, which held a $18.9 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining hedge funds that hold long positions include Jim Simons’s Renaissance Technologies, Ken Griffin’s Citadel Investment Group and Israel Englander’s Millennium Management.

Seeing as Rent-A-Center Inc (NASDAQ:RCII) has witnessed bearish sentiment from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of hedgies that elected to cut their entire stakes in Q1. Intriguingly, Roberto Mignone’s Bridger Management dumped the largest stake of all the hedgies we watch, comprising about $46 million in stock.. Eric Edidin and Josh Lobel’s fund, Archer Capital Management, also dropped its stock, about $14.5 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 7 funds in Q1.

What do corporate executives and insiders think about Rent-A-Center Inc (NASDAQ:RCII)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company we’re looking at has seen transactions within the past half-year. Over the last 180-day time period, Rent-A-Center Inc (NASDAQ:RCII) has seen zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Rent-A-Center Inc (NASDAQ:RCII). These stocks are Air Lease Corp (NYSE:AL), GATX Corporation (NYSE:GMT), Textainer Group Holdings Limited (NYSE:TGH), and Aaron’s, Inc. (NYSE:AAN). This group of stocks are the members of the rental & leasing services industry and their market caps are similar to RCII’s market cap.

With the results demonstrated by the aforementioned tactics, everyday investors should always keep an eye on hedge fund and insider trading sentiment, and Rent-A-Center Inc (NASDAQ:RCII) shareholders fit into this picture quite nicely.

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