You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make a proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
Is Regional Management Corp (NYSE:RM) a marvelous stock to buy now? Money managers are buying. The number of long hedge fund bets increased by 1 lately. Regional Management Corp (NYSE:RM) was in 18 hedge funds’ portfolios at the end of the third quarter of 2015. There were 17 hedge funds in our database with Regional Management Corp (NYSE:RM) positions at the end of the previous quarter. At the end of this article, we will also compare Regional Management Corp (NYSE:RM) to other stocks, including Rocket Fuel Inc (NASDAQ:FUEL), Heska Corp (NASDAQ:HSKA), and Neuberger Berman High Yield Strateges Fd (NYSEMKT:NHS) to get a better sense of its popularity.
Follow Regional Management Corp. (NYSE:RM)
Follow Regional Management Corp. (NYSE:RM)
At the moment, there are a large number of signals stock market investors have at their disposal to evaluate publicly traded companies. A duo of the most underrated signals are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the best picks of the best fund managers can outpace the S&P 500 by a superb margin (see the details here).
Keeping this in mind, let’s take a peek at the key action surrounding Regional Management Corp (NYSE:RM).
What have hedge funds been doing with Regional Management Corp (NYSE:RM)?
At the end of Q3, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 6% from the second quarter. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Tom Brown’s Second Curve Capital has the most valuable position in Regional Management Corp (NYSE:RM), worth close to $18.4 million, comprising 8.3% of its total 13F portfolio. The second largest stake is held by Matthew Lindenbaum of Basswood Capital, with a $16.8 million position; 0.8% of its 13F portfolio is allocated to the stock. Hedge funds and other institutional investors that are bullish contain J. Carlo Cannell’s Cannell Capital, Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management, and Phil Frohlich’s Prescott Group Capital Management.
Consequently, key hedge funds were leading the bulls’ herd. Whitebox Advisors, managed by Andy Redleaf, initiated the most valuable position in Regional Management Corp (NYSE:RM). Whitebox Advisors had $1 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also initiated a $0.2 million position during the quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Regional Management Corp (NYSE:RM) but similarly valued. These stocks are Rocket Fuel Inc (NASDAQ:FUEL), Heska Corp (NASDAQ:HSKA), Neuberger Berman High Yield Strateges Fd (NYSEMKT:NHS), and Northrim BanCorp, Inc. (NASDAQ:NRIM). All of these stocks’ market caps match Regional Management Corp (NYSE:RM)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FUEL | 10 | 9885 | 1 |
| HSKA | 9 | 27219 | 1 |
| NHS | 5 | 21953 | 1 |
| NRIM | 7 | 22074 | -1 |
As you can see, these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $20 million. That figure was $70 million in Regional Management Corp (NYSE:RM)’s case. Rocket Fuel Inc (NASDAQ:FUEL) is the most popular stock in this table. On the other hand, Neuberger Berman High Yield Strateges Fd (NYSEMKT:NHS) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks, Regional Management Corp (NYSE:RM) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
