The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st. We at Insider Monkey have made an extensive database of more than 866 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Rockwell Medical Inc (NASDAQ:RMTI) based on those filings.
Is RMTI a good stock to buy? Rockwell Medical Inc (NASDAQ:RMTI) was in 4 hedge funds’ portfolios at the end of March. The all time high for this statistic is 11. RMTI investors should pay attention to a decrease in enthusiasm from smart money in recent months. There were 5 hedge funds in our database with RMTI holdings at the end of December. Our calculations also showed that RMTI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Cliff Asness of AQR Capital 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. With all of this in mind we’re going to view the fresh hedge fund action surrounding Rockwell Medical Inc (NASDAQ:RMTI).
Do Hedge Funds Think RMTI 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 held long positions in this stock, a change of -20% from the previous quarter. The graph below displays the number of hedge funds with bullish position in RMTI over the last 23 quarters. 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 most valuable position in Rockwell Medical Inc (NASDAQ:RMTI). Renaissance Technologies has a $1.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by AQR Capital Management, managed by Cliff Asness, which holds a $0.8 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other peers with similar optimism comprise Ken Griffin’s Citadel Investment Group, Michael Gelband’s ExodusPoint Capital and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Renaissance Technologies allocated the biggest weight to Rockwell Medical Inc (NASDAQ:RMTI), around 0.002% of its 13F portfolio. AQR Capital Management is also relatively very bullish on the stock, designating 0.0014 percent of its 13F equity portfolio to RMTI.
Since Rockwell Medical Inc (NASDAQ:RMTI) has experienced declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there lies a certain “tier” of hedgies who sold off their full holdings by the end of the first quarter. At the top of the heap, Hal Mintz’s Sabby Capital dumped the largest stake of the “upper crust” of funds monitored by Insider Monkey, valued at an estimated $0.6 million in stock. Charles Davidson and Joseph Jacobs’s fund, Wexford Capital, also dropped its stock, about $0 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds by the end of the first quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Rockwell Medical Inc (NASDAQ:RMTI) but similarly valued. These stocks are Innovative Solutions & Support Inc (NASDAQ:ISSC), ENDRA Life Sciences Inc. (NASDAQ:NDRA), Neonode, Inc (NASDAQ:NEON), StealthGas Inc. (NASDAQ:GASS), Limbach Holdings, Inc. (NASDAQ:LMB), Aprea Therapeutics, Inc. (NASDAQ:APRE), and Randolph Bancorp, Inc. (NASDAQ:RNDB). This group of stocks’ market caps resemble RMTI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ISSC | 3 | 4725 | -1 |
| NDRA | 1 | 130 | -1 |
| NEON | 1 | 156 | 0 |
| GASS | 6 | 42785 | 0 |
| LMB | 9 | 15208 | 2 |
| APRE | 3 | 5334 | -3 |
| RNDB | 1 | 598 | 0 |
| Average | 3.4 | 9848 | -0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.4 hedge funds with bullish positions and the average amount invested in these stocks was $10 million. That figure was $3 million in RMTI’s case. Limbach Holdings, Inc. (NASDAQ:LMB) is the most popular stock in this table. On the other hand ENDRA Life Sciences Inc. (NASDAQ:NDRA) is the least popular one with only 1 bullish hedge fund positions. Rockwell Medical Inc (NASDAQ:RMTI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for RMTI is 33.7. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 beat the market again by 3.3 percentage points. Unfortunately RMTI wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on RMTI were disappointed as the stock returned -14.7% since the end of March (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Rockwell Medical Inc. (NASDAQ:RMTI)
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Disclosure: None. This article was originally published at Insider Monkey.
