Hedge funds run by legendary names like Nelson Peltz and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant out-performance. That’s why we pay special attention to hedge fund activity in these stocks.
Revance Therapeutics Inc (NASDAQ:RVNC) investors should pay attention to a decrease in activity from the world’s largest hedge funds recently. RVNC was in 10 hedge funds’ portfolios at the end of September. There were 12 hedge funds in our database with RVNC holdings at the end of the previous quarter. At the end of this article we will also compare RVNC to other stocks including Libbey Inc. (NYSEAMEX:LBY), Brookline Bancorp, Inc. (NASDAQ:BRKL), and Isle of Capri Casinos (NASDAQ:ISLE) to get a better sense of its popularity.
Follow Revance Therapeutics Inc. (NASDAQ:RVNC)
Follow Revance Therapeutics Inc. (NASDAQ:RVNC)
In the 21st century investor’s toolkit there are a lot of gauges shareholders can use to grade stocks. A couple of the most innovative gauges are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the top picks of the top money managers can trounce the broader indices by a very impressive margin (see the details here).
Keeping this in mind, let’s view the fresh action regarding Revance Therapeutics Inc (NASDAQ:RVNC).
What have hedge funds been doing with Revance Therapeutics Inc (NASDAQ:RVNC)?
At Q3’s end, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 17% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Polar Capital, managed by Brian Ashford-Russell and Tim Woolley, holds the largest position in Revance Therapeutics Inc (NASDAQ:RVNC), worth approximately $35.2 million and comprising 0.7% of its 13F portfolio. On Polar Capital’s heels is Israel Englander of Millennium Management, with a $5.3 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Other peers that are bullish contain Phill Gross and Robert Atchinson’s Adage Capital Management, and Jim Simons’s Renaissance Technologies.
Judging by the fact that Revance Therapeutics Inc (NASDAQ:RVNC) has faced bearish sentiment from the aggregate hedge fund industry, we can see that there lies a certain “tier” of money managers who sold off their positions entirely last quarter. It’s worth mentioning that Ken Griffin’s Citadel Investment Group dumped the largest stake of the 700 funds tracked by Insider Monkey, worth about $0.8 million in stock. Mike Vranos’s fund, Ellington, also sold off its stock, about $0.6 million worth of RVNC shares. These moves are intriguing to say the least, as total hedge fund interest dropped by 2 funds last quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Revance Therapeutics Inc (NASDAQ:RVNC) but similarly valued. We will take a look at Libbey Inc. (NYSEAMEX:LBY), Brookline Bancorp, Inc. (NASDAQ:BRKL), Isle of Capri Casinos (NASDAQ:ISLE), and Wabash National Corporation (NYSE:WNC). This group of stocks’ market values are closest to RVNC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LBY | 17 | 164033 | -2 |
| BRKL | 12 | 36843 | 0 |
| ISLE | 24 | 78108 | 1 |
| WNC | 24 | 66352 | 4 |
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $86 million. In the case of RVNC, that figure was $58 million. Isle of Capri Casinos (NASDAQ:ISLE) and Wabash National Corporation (NYSE:WNC) are leading the pack, while Brookline Bancorp, Inc. (NASDAQ:BRKL) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Revance Therapeutics Inc (NASDAQ:RVNC) is even less popular than BRKL. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, 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.
