World-class money managers like Bill Ackman and Barry Rosenstein only invest their wealthy clients’ money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It’s not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It’s also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.
Rentech Nitrogen Partners LP (NYSE:RNF) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 5 hedge funds’ portfolios at the end of September. At the end of this article we will also compare RNF to other stocks including Opower Inc (NYSE:OPWR), Collegium Pharmaceutical Inc (NASDAQ:COLL), and Aerie Pharmaceuticals Inc (NASDAQ:AERI) to get a better sense of its popularity.
Follow Rentech Nitrogen Partners L.p. (NYSE:RNF)
Follow Rentech Nitrogen Partners L.p. (NYSE:RNF)
With all of this in mind, we’re going to check out the latest action encompassing Rentech Nitrogen Partners LP (NYSE:RNF).
How have hedgies been trading Rentech Nitrogen Partners LP (NYSE:RNF)?
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, GLG Partners, managed by Noam Gottesman, holds the largest position in Rentech Nitrogen Partners LP (NYSE:RNF). GLG Partners has a $4.6 million position in the stock, comprising 0.1% of its 13F portfolio. The second most bullish fund manager is Jeff Buick of Trishield Capital Management, with a $2.4 million position; the fund has 2.6% of its 13F portfolio invested in the stock. Remaining members of the smart money that hold long positions include Jim Simons’s Renaissance Technologies, Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital and Marc Lehmann’s Riverloft Capital Management.
Since Rentech Nitrogen Partners LP (NYSE:RNF) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there was a specific group of fund managers who were dropping their full holdings by the end of the third quarter. Interestingly, Glenn W. Welling’s Engaged Capital dropped the largest investment of the “upper crust” of funds watched by Insider Monkey, worth about $1.4 million in stock, and Adam Usdan’s Trellus Management Company was right behind this move, as the fund said goodbye to about $1 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks similar to Rentech Nitrogen Partners LP (NYSE:RNF). We will take a look at Opower Inc (NYSE:OPWR), Collegium Pharmaceutical Inc (NASDAQ:COLL), Aerie Pharmaceuticals Inc (NASDAQ:AERI), and TAL International Group, Inc. (NYSE:TAL). This group of stocks’ market valuations match RNF’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OPWR | 11 | 41840 | 3 |
| COLL | 10 | 123239 | 1 |
| AERI | 19 | 148004 | 1 |
| TAL | 12 | 18630 | 3 |
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $83 million. That figure was $8 million in RNF’s case. Aerie Pharmaceuticals Inc (NASDAQ:AERI) is the most popular stock in this table. On the other hand Collegium Pharmaceutical Inc (NASDAQ:COLL) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Rentech Nitrogen Partners LP (NYSE:RNF) is even less popular than COLL. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
