Is The Ryland Group, Inc. (RYL) A Good Stock To Buy?

You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.

The Ryland Group, Inc. (NYSE:RYL) was in 23 hedge funds’ portfolios at the end of the third quarter of 2015. RYL has seen a decrease in support from the world’s most elite money managers lately. There were 28 hedge funds in our database with RYL 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 Lexington Realty Trust (NYSE:LXP), GATX Corporation (NYSE:GMT), and Balchem Corporation (NASDAQ:BCPC) to gather more data points.

Keeping this in mind, let’s take a gander at the new action regarding The Ryland Group, Inc. (NYSE:RYL).

What have hedge funds been doing with The Ryland Group, Inc. (NYSE:RYL)?

At Q3’s end, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of -18% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Robert Bishop’s Impala Asset Management has the number one position in The Ryland Group, Inc. (NYSE:RYL), worth close to $178 million, corresponding to 10.7% of its total 13F portfolio. On Impala Asset Management’s heels is Fisher Asset Management, led by Ken Fisher, holding a $90.9 million position; 0.2% of its 13F portfolio is allocated to the company. Some other members of the smart money that hold long positions include Ken Griffin’s Citadel Investment Group, Crispin Odey’s Odey Asset Management Group and Robert Hockett’s Covalent Capital Partners.

Since The Ryland Group, Inc. (NYSE:RYL) has faced a declination in interest from the aggregate hedge fund industry, it’s safe to say that there exists a select few fund managers that elected to cut their entire stakes heading into Q4. It’s worth mentioning that Greg Poole’s Echo Street Capital Management cut the biggest investment of the “upper crust” of funds watched by Insider Monkey, worth an estimated $20.9 million in stock. Eric Mindich’s fund, Eton Park Capital, also sold off its stock, about $13.3 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 5 funds heading into Q4.

Let’s go over hedge fund activity in other stocks similar to The Ryland Group, Inc. (NYSE:RYL). We will take a look at Lexington Realty Trust (NYSE:LXP), GATX Corporation (NYSE:GMT), Balchem Corporation (NASDAQ:BCPC), and AllianceBernstein Income Fund Inc. (NYSE:ACG). This group of stocks’ market caps are similar to RYL’s market cap.

As you can see these stocks had an average of 11.5 hedge funds with bullish positions and the average amount invested in these stocks was $101 million. That figure was $535 million in RYL’s case. Lexington Realty Trust (NYSE:LXP) is the most popular stock in this table. On the other hand Balchem Corporation (NASDAQ:BCPC) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks The Ryland Group, Inc. (NYSE:RYL) 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.