Is Ritter Pharmaceuticals Inc (NASDAQ:RTTR) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is Ritter Pharmaceuticals Inc (NASDAQ:RTTR) ready to rally soon? Investors who are in the know are taking a pessimistic view. The number of bullish hedge fund positions fell by 2 in recent months. RTTR was in 5 hedge funds’ portfolios at the end of September. There were 7 hedge funds in our database with RTTR 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 China Ceramics Co Ltd (NASDAQ:CCCL), Speed Commerce Inc (NASDAQ:SPDC), and InspireMD Inc (NYSEMKT:NSPR) to gather more data points.
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To most market participants, hedge funds are viewed as underperforming, old financial tools of yesteryear. While there are more than 8000 funds in operation at the moment, We choose to focus on the leaders of this club, approximately 700 funds. These money managers control the majority of the smart money’s total capital, and by observing their best investments, Insider Monkey has spotted a number of investment strategies that have historically exceeded the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
Now, we’re going to take a gander at the recent action regarding Ritter Pharmaceuticals Inc (NASDAQ:RTTR).
What have hedge funds been doing with Ritter Pharmaceuticals Inc (NASDAQ:RTTR)?
At Q3’s end, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -29% from the previous quarter. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Kevin Kotler’s Broadfin Capital has the largest position in Ritter Pharmaceuticals Inc (NASDAQ:RTTR), worth close to $1.6 million, accounting for 0.1% of its total 13F portfolio. Coming in second is Baker Bros. Advisors, managed by Julian Baker and Felix Baker, which holds a $0.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other professional money managers that are bullish encompass James Dondero’s Highland Capital Management, Israel Englander’s Millennium Management and Adam Usdan’s Trellus Management Company.
Since Ritter Pharmaceuticals Inc (NASDAQ:RTTR) has witnessed falling interest from the aggregate hedge fund industry, we can see that there exists a select few hedge funds that elected to cut their full holdings last quarter. Intriguingly, Anthony Giammalva’s Sound Energy Partners said goodbye to the biggest stake of the “upper crust” of funds tracked by Insider Monkey, valued at an estimated $0.1 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund said goodbye to about $0.1 million worth of shares. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 2 funds last quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Ritter Pharmaceuticals Inc (NASDAQ:RTTR) but similarly valued. We will take a look at China Ceramics Co Ltd (NASDAQ:CCCL), Speed Commerce Inc (NASDAQ:SPDC), InspireMD Inc (NYSEMKT:NSPR), and Lincoln Educational Services Corporation (NASDAQ:LINC). All of these stocks’ market caps are closest to RTTR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CCCL | 4 | 1739 | -1 |
| SPDC | 6 | 1624 | -2 |
| NSPR | 6 | 1696 | -1 |
| LINC | 6 | 2144 | -1 |
As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $2 million. That figure was $3 million in RTTR’s case. Speed Commerce Inc (NASDAQ:SPDC) is the most popular stock in this table. On the other hand, China Ceramics Co Ltd (NASDAQ:CCCL) is the least popular one with only 4 bullish hedge fund positions. Ritter Pharmaceuticals Inc (NASDAQ:RTTR) 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 SPDC might be a better candidate to consider a long position.