Ritchie Bros. Auctioneers (USA) (RBA): Hedge Funds and Insiders Are Bearish, What Should You Do?

Is Ritchie Bros. Auctioneers (USA) (NYSE:RBA) a great investment now? Investors who are in the know are becoming less hopeful. The number of long hedge fund positions fell by 2 recently.

In today’s marketplace, there are dozens of gauges market participants can use to monitor the equity markets. A pair of the best are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite investment managers can trounce the market by a healthy amount (see just how much).

Equally as beneficial, bullish insider trading activity is another way to break down the marketplace. Obviously, there are many reasons for an executive to sell shares of his or her company, but just one, very simple reason why they would buy. Many academic studies have demonstrated the useful potential of this method if shareholders understand what to do (learn more here).

Keeping this in mind, we’re going to take a look at the latest action regarding Ritchie Bros. Auctioneers (USA) (NYSE:RBA).

What have hedge funds been doing with Ritchie Bros. Auctioneers (USA) (NYSE:RBA)?

At Q1’s end, a total of 4 of the hedge funds we track were long in this stock, a change of -33% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their holdings significantly.

According to our comprehensive database, Chuck Royce’s Royce & Associates had the biggest position in Ritchie Bros. Auctioneers (USA) (NYSE:RBA), worth close to $179 million, accounting for 0.5% of its total 13F portfolio. On Royce & Associates’s heels is Force Capital, managed by Robert Jaffe, which held a $16.1 million position; 1.5% of its 13F portfolio is allocated to the stock. Some other hedgies that hold long positions include D. E. Shaw’s D E Shaw, and Ken Griffin’s Citadel Investment Group.

Because Ritchie Bros. Auctioneers (USA) (NYSE:RBA) has witnessed bearish sentiment from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of fund managers who sold off their entire stakes heading into Q2. Interestingly, Israel Englander’s Millennium Management dropped the biggest stake of the “upper crust” of funds we watch, valued at close to $0.7 million in stock.. Steven Cohen’s fund, SAC Capital Advisors, also cut its stock, about $0.5 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 2 funds heading into Q2.

What do corporate executives and insiders think about Ritchie Bros. Auctioneers (USA) (NYSE:RBA)?

Insider buying is most useful when the company in question has experienced transactions within the past half-year. Over the last 180-day time frame, Ritchie Bros. Auctioneers (USA) (NYSE:RBA) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Ritchie Bros. Auctioneers (USA) (NYSE:RBA). These stocks are Deluxe Corporation (NYSE:DLX), Portfolio Recovery Associates, Inc. (NASDAQ:PRAA), Lender Processing Services, Inc. (NYSE:LPS), RR Donnelley & Sons Co (NASDAQ:RRD), and HMS Holdings Corp. (NASDAQ:HMSY). This group of stocks are the members of the business services industry and their market caps are similar to RBA’s market cap.