Many investors, including Paul Tudor Jones or Stan Druckenmiller, have been saying before last year’s Q4 market crash that the stock market is overvalued due to a low interest rate environment that leads to companies swapping their equity for debt and focusing mostly on short-term performance such as beating the quarterly earnings estimates. In the first half of 2019, most investors recovered all of their Q4 losses as sentiment shifted and optimism dominated the US China trade negotiations. Nevertheless, many of the stocks that delivered strong returns in the first half still sport strong fundamentals and their gains were more related to the general market sentiment rather than their individual performance and hedge funds kept their bullish stance. In this article we will find out how hedge fund sentiment to Renasant Corporation (NASDAQ:RNST) changed recently.
Renasant Corporation (NASDAQ:RNST) was in 8 hedge funds’ portfolios at the end of the third quarter of 2019. RNST has seen a decrease in enthusiasm from smart money in recent months. There were 11 hedge funds in our database with RNST holdings at the end of the previous quarter. Our calculations also showed that RNST isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To most stock holders, hedge funds are assumed to be underperforming, outdated financial vehicles of years past. While there are greater than 8000 funds trading at present, Our experts hone in on the top tier of this club, about 750 funds. It is estimated that this group of investors shepherd the majority of the hedge fund industry’s total asset base, and by following their highest performing stock picks, Insider Monkey has brought to light various investment strategies that have historically outrun Mr. Market. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points annually since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Jim Simons of Renaissance Technologies
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s view the key hedge fund action regarding Renasant Corporation (NASDAQ:RNST).
What does smart money think about Renasant Corporation (NASDAQ:RNST)?
At the end of the third quarter, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -27% from the previous quarter. On the other hand, there were a total of 17 hedge funds with a bullish position in RNST a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Renaissance Technologies, , holds the biggest position in Renasant Corporation (NASDAQ:RNST). Renaissance Technologies has a $18.4 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Renaissance Technologies’s heels is PEAK6 Capital Management, led by Matthew Hulsizer, holding a $2.2 million call position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining members of the smart money that are bullish include Ken Griffin’s Citadel Investment Group, Noam Gottesman’s GLG Partners and Brandon Haley’s Holocene Advisors. In terms of the portfolio weights assigned to each position Weld Capital Management allocated the biggest weight to Renasant Corporation (NASDAQ:RNST), around 0.12% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.02 percent of its 13F equity portfolio to RNST.
Judging by the fact that Renasant Corporation (NASDAQ:RNST) has witnessed declining sentiment from the aggregate hedge fund industry, it’s safe to say that there exists a select few hedgies who sold off their positions entirely in the third quarter. It’s worth mentioning that Chuck Royce’s Royce & Associates cut the biggest stake of the 750 funds tracked by Insider Monkey, comprising about $1.2 million in stock. Paul Hondros’s fund, AlphaOne Capital Partners, also said goodbye to its stock, about $1 million worth. These moves are important to note, as total hedge fund interest fell by 3 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Renasant Corporation (NASDAQ:RNST) but similarly valued. We will take a look at LTC Properties Inc (NYSE:LTC), WesBanco, Inc. (NASDAQ:WSBC), Casella Waste Systems Inc. (NASDAQ:CWST), and Amicus Therapeutics, Inc. (NASDAQ:FOLD). This group of stocks’ market valuations resemble RNST’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LTC | 9 | 15502 | -3 |
| WSBC | 10 | 54038 | 0 |
| CWST | 12 | 166863 | 0 |
| FOLD | 26 | 690584 | -3 |
| Average | 14.25 | 231747 | -1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $232 million. That figure was $23 million in RNST’s case. Amicus Therapeutics, Inc. (NASDAQ:FOLD) is the most popular stock in this table. On the other hand LTC Properties Inc (NYSE:LTC) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Renasant Corporation (NASDAQ:RNST) is even less popular than LTC. Hedge funds dodged a bullet by taking a bearish stance towards RNST. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately RNST wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); RNST investors were disappointed as the stock returned 1.1% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
