How do we determine whether Real Industry Inc (NASDAQ:RELY) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
Is Real Industry Inc (NASDAQ:RELY) going to take off soon? The best stock pickers are taking a bearish view. The number of long hedge fund positions stayed the same which is a slightly negative development in our experience. Real Industry Inc (NASDAQ:RELY) was in 9 hedge funds’ portfolios at the end of September. There were 9 hedge funds in our database with Real Industry Inc (NASDAQ:RELY) holdings at the end of the previous quarter. At the end of this article, we will also compare Real Industry Inc (NASDAQ:RELY) to other stocks including Hooker Furniture Corporation (NASDAQ:HOFT), Reis Inc (NASDAQ:REIS), and American Science & Engineering, Inc. (NASDAQ:ASEI) to get a better sense of its popularity.
Follow Elah Holdings Inc. (NASDAQ:ELLH)
Follow Elah Holdings Inc. (NASDAQ:ELLH)
Now, let’s take a look at the recent action regarding Real Industry Inc (NASDAQ:RELY).
What have hedge funds been doing with Real Industry Inc (NASDAQ:RELY)?
At the end of Q3, a total of 9 of the hedge funds tracked by Insider Monkey were bullish in this stock, flat over the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
When looking at the hedgies followed by Insider Monkey, 12 West Capital Management, managed by Joel Ramin, holds the most valuable position in Real Industry Inc (NASDAQ:RELY). 12 West Capital Management has a $12.1 million position in the stock, comprising 1.8% of its 13F portfolio. The second most bullish hedge fund manager is Private Capital Management, led by Gregg J. Powers, holding a $7.8 million position; 0.9% of its 13F portfolio is allocated to the company. Some other peers with similar optimism comprise Thomas E. Claugus’s GMT Capital, Jeffrey Bronchick’s Cove Street Capital and Peter Keane’s Keane Capital Management.
Due to the fact that Real Industry Inc (NASDAQ:RELY) has experienced declining sentiment from the smart money, it’s safe to say that there was a specific group of funds that decided to sell off their entire stakes at the end of the third quarter. Interestingly, Warren Lammert’s Granite Point Capital cut the largest position of the “upper crust” of funds monitored by Insider Monkey, comprising close to $1 million in stock, and Andy Redleaf of Whitebox Advisors was right behind this move, as the fund said goodbye to about $0.8 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Real Industry Inc (NASDAQ:RELY) but similarly valued. We will take a look at Hooker Furniture Corporation (NASDAQ:HOFT), Reis Inc (NASDAQ:REIS), American Science & Engineering, Inc. (NASDAQ:ASEI), and OMNOVA Solutions Inc. (NYSE:OMN). All of these stocks’ market caps are closest to Real Industry Inc (NASDAQ:RELY)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HOFT | 10 | 30130 | -2 |
| REIS | 9 | 32097 | 1 |
| ASEI | 9 | 31319 | -2 |
| OMN | 14 | 15768 | 2 |
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $27 million.That figure was $25 millions in Real Industry Inc (NASDAQ:RELY)’s case. OMNOVA Solutions Inc. (NYSE:OMN) is the most popular stock in this table. On the other hand, Reis Inc (NASDAQ:REIS) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Real Industry Inc (NASDAQ:RELY) is even less popular than Reis Inc (NASDAQ:REIS). Considering that hedge funds aren’t fond of this stock, 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.