Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those elite funds in these small-cap stocks. In the following paragraphs, we analyze Rofin-Sinar Technologies (NASDAQ:RSTI) from the perspective of those elite funds.
Is Rofin-Sinar Technologies (NASDAQ:RSTI) a buy, sell, or hold? Money managers are taking a bullish view. The number of long hedge fund positions increased by 2 in recent months. At the end of this article we will also compare RSTI to other stocks including ADTRAN, Inc. (NASDAQ:ADTN), Luminex Corporation (NASDAQ:LMNX), and Harsco Corporation (NYSE:HSC) to get a better sense of its popularity.
Follow Rofin Sinar Technologies Inc (NASDAQ:RSTI)
Follow Rofin Sinar Technologies Inc (NASDAQ:RSTI)
In today’s marketplace there are plenty of tools market participants have at their disposal to evaluate stocks. A duo of the most under-the-radar tools are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the best picks of the top money managers can outpace the S&P 500 by a healthy amount (see the details here).
With all of this in mind, let’s take a glance at the new action encompassing Rofin-Sinar Technologies (NASDAQ:RSTI).
How are hedge funds trading Rofin-Sinar Technologies (NASDAQ:RSTI)?
Heading into Q4, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 14% from the second quarter. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Royce & Associates, managed by Chuck Royce, holds the biggest position in Rofin-Sinar Technologies (NASDAQ:RSTI). Royce & Associates has a $61.1 million position in the stock, comprising 0.3% of its 13F portfolio. Sitting at the No. 2 spot is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $5.8 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining professional money managers that hold long positions comprise Mario Gabelli’s GAMCO Investors, D. E. Shaw’s D E Shaw and Jim Simons’ Renaissance Technologies.
As aggregate interest increased, key hedge funds have jumped into Rofin-Sinar Technologies (NASDAQ:RSTI) headfirst. Fisher Asset Management, managed by Ken Fisher, established the biggest position in Rofin-Sinar Technologies (NASDAQ:RSTI). Fisher Asset Management had $2.4 million invested in the company at the end of the quarter. Joel Greenblatt’s Gotham Asset Management also made a $0.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Neil Chriss’s Hutchin Hill Capital, Paul Tudor Jones’s Tudor Investment Corp, and Ken Griffin’s Citadel Investment Group.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Rofin-Sinar Technologies (NASDAQ:RSTI) but similarly valued. We will take a look at ADTRAN, Inc. (NASDAQ:ADTN), Luminex Corporation (NASDAQ:LMNX), Harsco Corporation (NYSE:HSC), and Retrophin Inc (NASDAQ:RTRX). This group of stocks’ market valuations are closest to RSTI’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ADTN | 11 | 66842 | -1 |
| LMNX | 23 | 104104 | 1 |
| HSC | 17 | 68771 | 7 |
| RTRX | 22 | 290891 | -3 |
As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $133 million. That figure was $91 million in RSTI’s case. Luminex Corporation (NASDAQ:LMNX) is the most popular stock in this table. On the other hand ADTRAN, Inc. (NASDAQ:ADTN) is the least popular one with only 11 bullish hedge fund positions. Rofin-Sinar Technologies (NASDAQ:RSTI) 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 LMNX might be a better candidate to consider a long position.
