Is RELX Stock A Buy Here?

With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter of 2021. One of these stocks was Relx PLC (NYSE:RELX).

Is RELX stock a buy here? Relx PLC (NYSE:RELX) investors should pay attention to a decrease in support from the world’s most elite money managers lately. Relx PLC (NYSE:RELX) was in 4 hedge funds’ portfolios at the end of March. The all time high for this statistic is 8. There were 8 hedge funds in our database with RELX holdings at the end of December. Our calculations also showed that RELX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Ken Fisher of Fisher Asset Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $27 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now let’s take a peek at the fresh hedge fund action encompassing Relx PLC (NYSE:RELX).

Do Hedge Funds Think RELX Is A Good Stock To Buy Now?

Heading into the second quarter of 2021, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -50% from the previous quarter. By comparison, 5 hedge funds held shares or bullish call options in RELX a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies,  holds the number one position in Relx PLC (NYSE:RELX). Renaissance Technologies has a $55.6 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $28.6 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other peers with similar optimism encompass Ken Fisher’s Fisher Asset Management, Thomas Bailard’s Bailard Inc and . In terms of the portfolio weights assigned to each position Renaissance Technologies allocated the biggest weight to Relx PLC (NYSE:RELX), around 0.07% of its 13F portfolio. Arrowstreet Capital is also relatively very bullish on the stock, earmarking 0.04 percent of its 13F equity portfolio to RELX.

Since Relx PLC (NYSE:RELX) has faced declining sentiment from hedge fund managers, it’s safe to say that there was a specific group of hedgies that elected to cut their full holdings by the end of the first quarter. Intriguingly, Israel Englander’s Millennium Management cut the biggest position of the 750 funds watched by Insider Monkey, totaling about $5.6 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund dropped about $1 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 4 funds by the end of the first quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Relx PLC (NYSE:RELX) but similarly valued. We will take a look at Dollar General Corp. (NYSE:DG), Keurig Dr Pepper Inc. (NASDAQ:KDP), Newmont Corporation (NYSE:NEM), Monster Beverage Corp (NASDAQ:MNST), Marriott International Inc (NASDAQ:MAR), Enterprise Products Partners L.P. (NYSE:EPD), and Freeport-McMoRan Inc. (NYSE:FCX). This group of stocks’ market values are similar to RELX’s market value.

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As you can see these stocks had an average of 46 hedge funds with bullish positions and the average amount invested in these stocks was $1902 million. That figure was $85 million in RELX’s case. Freeport-McMoRan Inc. (NYSE:FCX) is the most popular stock in this table. On the other hand Enterprise Products Partners L.P. (NYSE:EPD) is the least popular one with only 26 bullish hedge fund positions. Compared to these stocks Relx PLC (NYSE:RELX) is even less popular than EPD. Our overall hedge fund sentiment score for RELX is 16. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Hedge funds clearly dropped the ball on RELX as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. A small number of hedge funds were also right about betting on RELX as the stock returned 9.1% since Q1 (through June 11th) and outperformed the market by an even larger margin.

Disclosure: None. This article was originally published at Insider Monkey.