Is RigNet Inc (NASDAQ:RNET) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is RigNet Inc (NASDAQ:RNET) ready to rally soon? Investors who are in the know are betting on the stock. The number of bullish hedge fund positions improved by 1 in recent months. RNET was in 9 hedge funds’ portfolios at the end of September. There were 8 hedge funds in our database with RNET holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as RAIT Financial Trust (NYSE:RAS), Tejon Ranch Company (NYSE:TRC), and Steel Partners Holdings LP (NYSE:SPLP) to gather more data points.
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According to most shareholders, hedge funds are assumed to be slow, outdated financial vehicles of years past. While there are more than 8000 funds trading at present, We hone in on the leaders of this club, around 700 funds. These investment experts have their hands on bulk of all hedge funds’ total capital, and by tracking their top stock picks, Insider Monkey has uncovered many investment strategies that have historically outperformed the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points per year for a decade in their back tests.
With all of this in mind, let’s view the key action regarding RigNet Inc (NASDAQ:RNET).
How have hedgies been trading RigNet Inc (NASDAQ:RNET)?
At Q3’s end, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from one quarter earlier. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Rutabaga Capital Management, managed by Peter Schliemann, holds the most valuable position in RigNet Inc (NASDAQ:RNET). Rutabaga Capital Management has an $23.3 million position in the stock, comprising 2.9% of its 13F portfolio. Sitting at the No. 2 spot is Sagard Capital Partners Management Corp, led by Dan Friedberg, holding an $6.3 million position; 2.2% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors that hold long positions contain Jim Simons’s Renaissance Technologies, Dennis Leibowitz’s Act II Capital and Paul Hondros’s AlphaOne Capital Partners.
As aggregate interest increased, specific money managers have been driving this bullishness. Rutabaga Capital Management assembled the biggest position in RigNet Inc (NASDAQ:RNET). AlphaOne Capital Partners also initiated a $1.9 million position during the quarter. The other funds with brand new RNET positions are John Overdeck and David Siegel’s Two Sigma Advisors and Chao Ku’s Nine Chapters Capital Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as RigNet Inc (NASDAQ:RNET) but similarly valued. These stocks are RAIT Financial Trust (NYSE:RAS), Tejon Ranch Company (NYSE:TRC), Steel Partners Holdings LP (NYSE:SPLP), and Timkensteel Corp (NYSE:TMST). This group of stocks’ market valuations are similar to RNET’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RAS | 15 | 46651 | 1 |
| TRC | 6 | 110737 | 1 |
| SPLP | 7 | 73864 | 2 |
| TMST | 16 | 33449 | 3 |
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 $66 million, slightly higher than the $40 million figure in RNET’s case. Timkensteel Corp (NYSE:TMST) is the most popular stock in this table. On the other hand, Tejon Ranch Company (NYSE:TRC) is the least popular one with only 6 bullish hedge fund positions. RigNet Inc (NASDAQ:RNET) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard TMST might be a better candidate to consider a long position.
