Here is What Hedge Funds Think About Restoration Hardware Holdings Inc (RH)

Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.

Restoration Hardware Holdings Inc (NYSE:RH) has experienced an increase in support from the world’s most elite money managers of late. 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 Knight Capital Group Inc. (NYSE:KCG), Evertec Inc (NYSE:EVTC), and Moelis & Co (NYSE:MC) to gather more data points.

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Now, let’s view the latest action encompassing Restoration Hardware Holdings Inc (NYSE:RH).

What have hedge funds been doing with Restoration Hardware Holdings Inc (NYSE:RH)?

At Q3’s end, a total of 34 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 42% from the previous quarter. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Michael A. Price and Amos Meron’s Empyrean Capital Partners has the biggest position in Restoration Hardware Holdings Inc (NYSE:RH), worth close to $48.4 million, corresponding to 2.4% of its total 13F portfolio. Remaining hedge funds and institutional investors that hold long positions include Pasco Alfaro / Richard Tumure’s Miura Global Management, and Richard Mashaal’s Rima Senvest Management.

As one would reasonably expect, some big names were leading the bulls’ herd. Point72 Asset Management, managed by Steve Cohen, created the biggest position in Restoration Hardware Holdings Inc (NYSE:RH). Point72 Asset Management had $40.2 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $32.1 million position during the quarter. The other funds with brand new RH positions are Alexander Mitchell’s Scopus Asset Management, Christopher A. Winham’s Tide Point Capital, and Gregory Thomas’ Carbonado Capital.

Let’s check out hedge fund activity in other stocks similar to Restoration Hardware Holdings Inc (NYSE:RH). We will take a look at Knight Capital Group Inc. (NYSE:KCG), Evertec Inc (NYSE:EVTC), Moelis & Co (NYSE:MC), and Quad/Graphics, Inc. (NYSE:QUAD). All of these stocks’ market caps are similar to RH’s market cap.

As you can see these stocks had an average of 15.75 hedge funds with bullish positions and the average amount invested in these stocks was $126 million. That figure was $407 million in RH’s case. Quad/Graphics, Inc. (NYSE:QUAD) is the most popular stock in this table. On the other hand Moelis & Co (NYSE:MC) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Restoration Hardware Holdings Inc (NYSE:RH) 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.