After several tireless days we have finished crunching the numbers from the more than 700 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Rapid7 Inc (NASDAQ:RPD).
Is Rapid7 Inc (NASDAQ:RPD) a good stock to buy now? The stock went public in July and following a volatile couple of months, it has lost 40% since the IPO. Following the IPO, the stock managed to capture the attention of just five funds among those we track and we decided to take a closer look at the investors that disclosed stakes in the company in the latest round of 13F filings. However, 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 Globe Specialty Metals, Inc. (NASDAQ:GSM), Astronics Corporation (NASDAQ:ATRO), and Advantage Oil & Gas Ltd (USA) (NYSE:AAV) to gather more data points.
Follow Rapid7 Inc. (NASDAQ:RPD)
Follow Rapid7 Inc. (NASDAQ:RPD)
Today there are a multitude of formulas investors employ to assess stocks. A pair of the less utilized formulas are hedge fund and insider trading interest. We have shown that, historically, those who follow the top picks of the best hedge fund managers can trounce the broader indices by a very impressive margin (see the details here).
With all of this in mind, let’s review the new action surrounding Rapid7 Inc (NASDAQ:RPD).
How have hedgies been trading Rapid7 Inc (NASDAQ:RPD)?
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Driehaus Capital, managed by Richard Driehaus, holds the most valuable position in Rapid7 Inc (NASDAQ:RPD). Driehaus Capital has a $7.3 million position in the stock, comprising 0.3% of its 13F portfolio. On Driehaus Capital’s heels is G2 Investment Partners Management, led by Josh Goldberg, holding a $3.7 million position; the fund has 1.4% of its 13F portfolio invested in the stock. Other peers that hold long positions encompass Paul Tudor Jones’ Tudor Investment Corp, Israel Englander’s Millennium Management, and Ken Griffin’s Citadel Investment Group.
Let’s now review hedge fund activity in other stocks similar to Rapid7 Inc (NASDAQ:RPD). We will take a look at Globe Specialty Metals, Inc. (NASDAQ:GSM), Astronics Corporation (NASDAQ:ATRO), Advantage Oil & Gas Ltd (USA) (NYSE:AAV), and TPG Specialty Lending Inc (NYSE:TSLX). This group of stocks’ market caps match RPD’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GSM | 23 | 238916 | -4 |
| ATRO | 19 | 32401 | 4 |
| AAV | 6 | 6871 | -2 |
| TSLX | 6 | 7302 | 1 |
As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $71 million. That figure was just $13 million in RPD’s case. Globe Specialty Metals, Inc. (NASDAQ:GSM) is the most popular stock in this table. On the other hand Advantage Oil & Gas Ltd (USA) (NYSE:AAV) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Rapid7 Inc (NASDAQ:RPD) is even less popular than AAV. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.