We at Insider Monkey have gone over 730 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of June 28th. In this article, we look at what those funds think of Rio Tinto Group (NYSE:RIO) based on that data.
Rio Tinto Group (NYSE:RIO) investors should pay attention to an increase in hedge fund sentiment lately. RIO was in 24 hedge funds’ portfolios at the end of the second quarter of 2019. There were 22 hedge funds in our database with RIO holdings at the end of the previous quarter. Our calculations also showed that RIO isn’t among the 30 most popular stocks among hedge funds (see the video at the end of this article).
In the financial world there are numerous metrics market participants put to use to analyze their holdings. Some of the less known metrics are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the top picks of the elite investment managers can outperform the market by a solid amount (see the details here).
Unlike some fund managers who are betting on Dow reaching 40000 in a year, 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. Let’s take a gander at the fresh hedge fund action encompassing Rio Tinto Group (NYSE:RIO).
Hedge fund activity in Rio Tinto Group (NYSE:RIO)
Heading into the third quarter of 2019, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of 9% from the first quarter of 2019. The graph below displays the number of hedge funds with bullish position in RIO over the last 16 quarters. 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 Rio Tinto Group (NYSE:RIO) was held by Arrowstreet Capital, which reported holding $735.6 million worth of stock at the end of March. It was followed by Fisher Asset Management with a $658.8 million position. Other investors bullish on the company included Impala Asset Management, Two Sigma Advisors, and Citadel Investment Group.
As one would reasonably expect, specific money managers were leading the bulls’ herd. Encompass Capital Advisors, managed by Todd J. Kantor, initiated the largest position in Rio Tinto Group (NYSE:RIO). Encompass Capital Advisors had $18.7 million invested in the company at the end of the quarter. Robert Bishop’s Impala Asset Management also initiated a $9.8 million position during the quarter. The other funds with brand new RIO positions are Alexander Mitchell’s Scopus Asset Management, Matthew Hulsizer’s PEAK6 Capital Management, and Minhua Zhang’s Weld Capital Management.
Let’s now take a look at hedge fund activity in other stocks similar to Rio Tinto Group (NYSE:RIO). We will take a look at The Toronto-Dominion Bank (NYSE:TD), American Express Company (NYSE:AXP), Lockheed Martin Corporation (NYSE:LMT), and Starbucks Corporation (NASDAQ:SBUX). This group of stocks’ market caps match RIO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TD | 18 | 648247 | 0 |
| AXP | 45 | 22025448 | -12 |
| LMT | 48 | 1348962 | 13 |
| SBUX | 49 | 5242004 | 2 |
| Average | 40 | 7316165 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 40 hedge funds with bullish positions and the average amount invested in these stocks was $7316 million. That figure was $1914 million in RIO’s case. Starbucks Corporation (NASDAQ:SBUX) is the most popular stock in this table. On the other hand The Toronto-Dominion Bank (NYSE:TD) is the least popular one with only 18 bullish hedge fund positions. Rio Tinto Group (NYSE:RIO) 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. 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. Unfortunately RIO wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); RIO investors were disappointed as the stock returned -12.9% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far in 2019.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
