Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 750 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Re/Max Holdings Inc (NYSE:RMAX).
Re/Max Holdings Inc (NYSE:RMAX) was in 10 hedge funds’ portfolios at the end of June. RMAX has seen an increase in activity from the world’s largest hedge funds lately. There were 6 hedge funds in our database with RMAX positions at the end of the previous quarter. Our calculations also showed that RMAX isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In today’s marketplace there are several gauges investors can use to grade stocks. Some of the less utilized gauges are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the top investment managers can outperform their index-focused peers by a solid margin (see the details here).
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to take a look at the key hedge fund action regarding Re/Max Holdings Inc (NYSE:RMAX).
How are hedge funds trading Re/Max Holdings Inc (NYSE:RMAX)?
Heading into the third quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 67% from the previous quarter. On the other hand, there were a total of 8 hedge funds with a bullish position in RMAX a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Re/Max Holdings Inc (NYSE:RMAX) was held by Renaissance Technologies, which reported holding $38.6 million worth of stock at the end of March. It was followed by Millennium Management with a $14.2 million position. Other investors bullish on the company included Arrowstreet Capital, Okumus Fund Management, and Tudor Investment Corp.
Now, key money managers have jumped into Re/Max Holdings Inc (NYSE:RMAX) headfirst. Okumus Fund Management, managed by Ahmet Okumus, initiated the largest position in Re/Max Holdings Inc (NYSE:RMAX). Okumus Fund Management had $1.2 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also made a $0.9 million investment in the stock during the quarter. The following funds were also among the new RMAX investors: Paul Marshall and Ian Wace’s Marshall Wace LLP, Benjamin A. Smith’s Laurion Capital Management, and Frank Slattery’s Symmetry Peak Management.
Let’s check out hedge fund activity in other stocks similar to Re/Max Holdings Inc (NYSE:RMAX). These stocks are OneSpan Inc. (NASDAQ:OSPN), CEVA, Inc. (NASDAQ:CEVA), Echo Global Logistics, Inc. (NASDAQ:ECHO), and Ribbon Communications Inc. (NASDAQ:RBBN). This group of stocks’ market valuations match RMAX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OSPN | 10 | 71773 | -3 |
| CEVA | 10 | 25856 | 0 |
| ECHO | 12 | 19323 | -1 |
| RBBN | 11 | 36379 | -1 |
| Average | 10.75 | 38333 | -1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $38 million. That figure was $60 million in RMAX’s case. Echo Global Logistics, Inc. (NASDAQ:ECHO) is the most popular stock in this table. On the other hand OneSpan Inc. (NASDAQ:OSPN) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Re/Max Holdings Inc (NYSE:RMAX) is even less popular than OSPN. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on RMAX, though not to the same extent, as the stock returned 5.4% during the third quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
