At Insider Monkey, we pore over the filings of nearly 750 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of December 31. In this article, we will use that wealth of knowledge to determine whether or not REX American Resources Corp (NYSE:REX) makes for a good investment right now.
REX American Resources Corp (NYSE:REX) investors should pay attention to an increase in hedge fund sentiment recently. REX was in 7 hedge funds’ portfolios at the end of December. There were 6 hedge funds in our database with REX holdings at the end of the previous quarter. Our calculations also showed that REX isn’t among the 30 most popular stocks among hedge funds.
To most shareholders, hedge funds are viewed as slow, old financial tools of the past. While there are over 8000 funds with their doors open today, We look at the leaders of this group, around 750 funds. Most estimates calculate that this group of people manage the lion’s share of the hedge fund industry’s total capital, and by following their highest performing picks, Insider Monkey has unsheathed numerous investment strategies that have historically exceeded the broader indices. Insider Monkey’s flagship hedge fund strategy exceeded the S&P 500 index by nearly 5 percentage points a year since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 27.5% since February 2017 (through March 12th) even though the market was up nearly 25% during the same period. We just shared a list of 6 short targets in our latest quarterly update and they are already down an average of 6% in less than a month.
Let’s go over the recent hedge fund action encompassing REX American Resources Corp (NYSE:REX).
What does the smart money think about REX American Resources Corp (NYSE:REX)?
At the end of the fourth quarter, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a change of 17% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in REX over the last 14 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in REX American Resources Corp (NYSE:REX) was held by Renaissance Technologies, which reported holding $33.4 million worth of stock at the end of December. It was followed by AQR Capital Management with a $1.8 million position. Other investors bullish on the company included Millennium Management, Two Sigma Advisors, and D E Shaw.
As aggregate interest increased, key hedge funds have been driving this bullishness. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the largest position in REX American Resources Corp (NYSE:REX). Marshall Wace LLP had $0 million invested in the company at the end of the quarter.
Let’s go over hedge fund activity in other stocks similar to REX American Resources Corp (NYSE:REX). These stocks are Flexion Therapeutics Inc (NASDAQ:FLXN), Antares Pharma Inc (NASDAQ:ATRS), Yintech Investment Holdings Limited (NASDAQ:YIN), and Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI). This group of stocks’ market values are closest to REX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FLXN | 14 | 51371 | -1 |
| ATRS | 10 | 46034 | 1 |
| YIN | 2 | 365 | 1 |
| ACBI | 14 | 81927 | -3 |
| Average | 10 | 44924 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $45 million. That figure was $37 million in REX’s case. Flexion Therapeutics Inc (NASDAQ:FLXN) is the most popular stock in this table. On the other hand Yintech Investment Holdings Limited (NASDAQ:YIN) is the least popular one with only 2 bullish hedge fund positions. REX American Resources Corp (NYSE:REX) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. A small number of hedge funds were also right about betting on REX, though not to the same extent, as the stock returned 22.8% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
