Rockwell Medical Inc (RMTI)Hedge Funds Are Snapping Up

Between June 25 and October 30th the Russell 2000 ETF (IWM) lagged the larger S&P 500 ETF (SPY) by more than 14 percentage points as investors worried over the possible ramifications of rising interest rates. The hedge funds and institutional investors we track typically invest more in smaller-cap stocks than an average investor, and we have seen data that shows those funds paring back their overall exposure. Those funds cutting positions in small-caps is one reason why volatility has increased. In the following paragraphs, we take a closer look at what hedge funds and prominent investors think of Rockwell Medical Inc (NASDAQ:RMTI) and see how the stock is affected by the recent hedge fund activity.

Rockwell Medical Inc (NASDAQ:RMTI) has experienced an increase in support from the world’s most elite money managers of late. RMTI was in 10 hedge funds’ portfolios at the end of September. There were 8 hedge funds in our database with RMTI positions at the end of the previous quarter. At the end of this article we will also compare RMTI to other stocks including Coeur d’Alene Mines Corporation (NYSE:CDE), Blue Nile Inc (NASDAQ:NILE), and Easterly Government Properties Inc (NYSE:DEA) to get a better sense of its popularity.

According to most market participants, hedge funds are assumed to be worthless, old financial vehicles of yesteryear. While there are more than 8000 funds trading at present, We look at the aristocrats of this group, about 700 funds. These money managers handle most of the hedge fund industry’s total asset base, and by tailing their top investments, Insider Monkey has brought to light various investment strategies that have historically outpaced the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy outstripped the S&P 500 index by 12 percentage points per year for a decade in their back tests.

Now, we’re going to check out the fresh action regarding Rockwell Medical Inc (NASDAQ:RMTI).

What does the smart money think about Rockwell Medical Inc (NASDAQ:RMTI)?

At the end of the third quarter, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Bihua Chen’s Cormorant Asset Management has the largest position in Rockwell Medical Inc (NASDAQ:RMTI), worth close to $8.5 million, amounting to 1.4% of its total 13F portfolio. Sitting at the No. 2 spot is Gordy Holterman and Derek Dunn of Overland Advisors, with an $1.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining members of the smart money that hold long positions contain Ken Griffin’s Citadel Investment Group, Paul Tudor Jones’s Tudor Investment Corp and Hal Mintz’s Sabby Capital.

Now, key hedge funds were leading the bulls’ herd. Ellington, managed by Mike Vranos, assembled the most outsized position in Rockwell Medical Inc (NASDAQ:RMTI). Ellington had $0.3 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also made an $0.2 million investment in the stock during the quarter. The following funds were also among the new RMTI investors: Cliff Asness’s AQR Capital Management and David Costen Haley’s HBK Investments.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Rockwell Medical Inc (NASDAQ:RMTI) but similarly valued. These stocks are Coeur d’Alene Mines Corporation (NYSE:CDE), Blue Nile Inc (NASDAQ:NILE), Easterly Government Properties Inc (NYSE:DEA), and Middlesex Water Company (NASDAQ:MSEX). This group of stocks’ market values are similar to RMTI’s market value.

As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $33 million. That figure was $12 million in RMTI’s case. Coeur d’Alene Mines Corporation (NYSE:CDE) is the most popular stock in this table. On the other hand, Easterly Government Properties Inc (NYSE:DEA) is the least popular one with only 7 bullish hedge fund positions. Event though Rockwell Medical Inc (NASDAQ:RMTI) is not the least popular stock in this group, hedge fund interest is still below average. This is may imply it is not a good stock to buy; therefore, we’d rather spend our time researching stocks that hedge funds are piling on. In this case, CDE might be a better candidate to consider a long position.