Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
Ruby Tuesday, Inc. (NYSE:RT) investors should pay attention to a decrease in support from the world’s most successful money managers lately. RT was in 15 hedge funds’ portfolios at the end of September. There were 16 hedge funds in our database with RT positions 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 Telenav Inc (NASDAQ:TNAV), Malibu Boats Inc (NASDAQ:MBUU), and Nutraceutical Int’l Corp. (NASDAQ:NUTR) to gather more data points.
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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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How are hedge funds trading Ruby Tuesday, Inc. (NYSE:RT)?
Heading into the fourth quarter of 2016, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a decline of 6% from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards RT over the last 5 quarters. So, let’s see 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, Engaged Capital, led by Glenn W. Welling, holds the biggest position in Ruby Tuesday, Inc. (NYSE:RT). Engaged Capital has a $5.1 million position in the stock, comprising 1.8% of its 13F portfolio. The second most bullish hedge fund is Jim Simons’ Renaissance Technologies, with a $4.4 million position. Other hedge funds and institutional investors that are bullish encompass Chuck Royce’s Royce & Associates, Ken Griffin’s Citadel Investment Group and Steve Tannenbaum’s Greenwood Investments. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that cut their entire stakes in the stock during the third quarter. At the top of the heap, Michael Swotes’ Castle Ridge Investment Management cut the largest stake of all the investors studied by Insider Monkey, valued at close to $1.1 million in stock. Mike Vranos’ fund, Ellington, also said goodbye to its stock, about $0.1 million worth.
Let’s also examine hedge fund activity in other stocks similar to Ruby Tuesday, Inc. (NYSE:RT). We will take a look at Telenav Inc (NASDAQ:TNAV), Malibu Boats Inc (NASDAQ:MBUU), Nutraceutical Int’l Corp. (NASDAQ:NUTR), and Spartan Motors Inc (NASDAQ:SPAR). This group of stocks’ market valuations match RT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TNAV | 9 | 52911 | -1 |
| MBUU | 14 | 15825 | 5 |
| NUTR | 4 | 24796 | -1 |
| SPAR | 14 | 49536 | 1 |
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $36 million. That figure was $23 million in RT’s case. Malibu Boats Inc (NASDAQ:MBUU) is the most popular stock in this table. On the other hand Nutraceutical Int’l Corp. (NASDAQ:NUTR) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Ruby Tuesday, Inc. (NYSE:RT) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
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