Is RLGY Stock A Buy or Sell?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the fourth quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of Realogy Holdings Corp (NYSE:RLGY) based on that data.

Is RLGY stock a buy? Realogy Holdings Corp (NYSE:RLGY) shareholders have witnessed a decrease in support from the world’s most elite money managers of late. Realogy Holdings Corp (NYSE:RLGY) was in 26 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 49. There were 27 hedge funds in our database with RLGY positions at the end of the third quarter. Our calculations also showed that RLGY isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Today there are a large number of tools shareholders can use to appraise their holdings. Two of the most under-the-radar tools are hedge fund and insider trading activity. We have shown that, historically, those who follow the top picks of the top money managers can beat their index-focused peers by a significant amount (see the details here).

Mason Hawkins of Southeastern Asset Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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 website. Keeping this in mind we’re going to go over the new hedge fund action encompassing Realogy Holdings Corp (NYSE:RLGY).

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

Heading into the first quarter of 2021, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from the third quarter of 2020. By comparison, 30 hedge funds held shares or bullish call options in RLGY a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Realogy Holdings Corp (NYSE:RLGY) was held by Southeastern Asset Management, which reported holding $114.9 million worth of stock at the end of December. It was followed by Tremblant Capital with a $75.4 million position. Other investors bullish on the company included Pzena Investment Management, Prentice Capital Management, and Renaissance Technologies. In terms of the portfolio weights assigned to each position Prentice Capital Management allocated the biggest weight to Realogy Holdings Corp (NYSE:RLGY), around 7.43% of its 13F portfolio. Southeastern Asset Management is also relatively very bullish on the stock, dishing out 2.57 percent of its 13F equity portfolio to RLGY.

Due to the fact that Realogy Holdings Corp (NYSE:RLGY) has witnessed a decline in interest from the aggregate hedge fund industry, logic holds that there is a sect of hedge funds who were dropping their full holdings heading into Q1. At the top of the heap, Michael Anderson’s Hi-Line Capital Management sold off the biggest position of the “upper crust” of funds followed by Insider Monkey, totaling about $2.5 million in stock, and David Harding’s Winton Capital Management was right behind this move, as the fund said goodbye to about $0.8 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 1 funds heading into Q1.

Let’s now take a look at hedge fund activity in other stocks similar to Realogy Holdings Corp (NYSE:RLGY). We will take a look at Sandy Spring Bancorp Inc. (NASDAQ:SASR), Urban Edge Properties (NYSE:UE), Construction Partners, Inc. (NASDAQ:ROAD), James River Group Holdings Ltd (NASDAQ:JRVR), Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW), ACM Research, Inc. (NASDAQ:ACMR), and Inovio Pharmaceuticals Inc (NYSE:INO). This group of stocks’ market caps are closest to RLGY’s market cap.

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As you can see these stocks had an average of 15.3 hedge funds with bullish positions and the average amount invested in these stocks was $108 million. That figure was $358 million in RLGY’s case. Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW) is the most popular stock in this table. On the other hand Sandy Spring Bancorp Inc. (NASDAQ:SASR) is the least popular one with only 8 bullish hedge fund positions. Realogy Holdings Corp (NYSE:RLGY) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for RLGY is 53.3. 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. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and still beat the market by 0.9 percentage points. Hedge funds were also right about betting on RLGY as the stock returned 17% since the end of Q4 (through 4/19) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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

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