Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those successful funds in these small-cap stocks. In the following paragraphs, we analyze Regis Corporation (NYSE:RGS) from the perspective of those successful funds.
Regis Corporation (NYSE:RGS) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 14 hedge funds’ portfolios at the end of the third quarter of 2016, same as at the end of June. At the end of this article we will also compare RGS to other stocks including Republic Bancorp, Inc. KY (NASDAQ:RBCAA), Quidel Corporation (NASDAQ:QDEL), and Flushing Financial Corporation (NASDAQ:FFIC) to get a better sense of its popularity.
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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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How are hedge funds trading Regis Corporation (NYSE:RGS)?
Heading into the fourth quarter of 2016, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, unchanged from one quarter earlier. By comparison, 18 hedge funds held shares or bullish call options in RGS heading into this year, so hedge fund ownership has slid notably in 2016. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Daniel Beltzman and Gergory Smith’s Birch Run Capital has the most valuable position in Regis Corporation (NYSE:RGS), worth close to $133.7 million, comprising 50.5% of its total 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, founded by Jim Simons, which holds a $21 million position. Some other peers with similar optimism comprise Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC, Peter Schliemann’s Rutabaga Capital Management, and David E. Shaw’s D E Shaw. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that cashed in their entire stakes in the stock during the third quarter. Interestingly, George Hall’s Clinton Group cashed in the largest investment of all the hedgies monitored by Insider Monkey, worth about $0.3 million in stock. David Costen Haley’s fund, HBK Investments, also cut its stock, about $0.2 million worth.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Regis Corporation (NYSE:RGS) but similarly valued. We will take a look at Republic Bancorp, Inc. KY (NASDAQ:RBCAA), Quidel Corporation (NASDAQ:QDEL), Flushing Financial Corporation (NASDAQ:FFIC), and Richmont Mines Inc. (USA) (NYSEAMEX:RIC). This group of stocks’ market caps match RGS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RBCAA | 5 | 19468 | 0 |
| QDEL | 7 | 43435 | 1 |
| FFIC | 10 | 42509 | 3 |
| RIC | 9 | 74547 | 0 |
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 $45 million. That figure was $195 million in RGS’s case. Flushing Financial Corporation (NASDAQ:FFIC) is the most popular stock in this table. On the other hand Republic Bancorp, Inc. KY (NASDAQ:RBCAA) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Regis Corporation (NYSE:RGS) 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.
Disclosure: None
