RPC, Inc. (RES): Are Hedge Funds Right About This Stock?

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on RPC, Inc. (NYSE:RES).

Is RPC, Inc. (NYSE:RES) a healthy stock for your portfolio? Hedge funds are becoming less confident. The number of bullish hedge fund bets were trimmed by 2 lately. At the end of this article we will also compare RES to other stocks including Crown Media Holdings, Inc (NASDAQ:CRWN), Novavax, Inc. (NASDAQ:NVAX), and The Ryland Group, Inc. (NYSE:RYL) to get a better sense of its popularity.

In the eyes of most shareholders, hedge funds are perceived as unimportant, old investment vehicles of the past. While there are more than 8000 funds trading at present, Our experts hone in on the aristocrats of this club, around 700 funds. It is estimated that this group of investors shepherd bulk of the smart money’s total asset base, and by watching their inimitable equity investments, Insider Monkey has formulated various investment strategies that have historically outpaced Mr. Market. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points per annum for a decade in their back tests.

Keeping this in mind, let’s take a look at the recent action regarding RPC, Inc. (NYSE:RES).

What have hedge funds been doing with RPC, Inc. (NYSE:RES)?

At Q3’s end, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -11% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Mario Gabelli’s GAMCO Investors has the largest position in RPC, Inc. (NYSE:RES), worth close to $49.5 million, comprising 0.3% of its total 13F portfolio. On GAMCO Investors’s heels is Citadel Investment Group, managed by Ken Griffin, which holds an $20.3 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Other professional money managers that are bullish contain Jim Simons’s Renaissance Technologies, Brian Taylor’s Pine River Capital Management and Chuck Royce’s Royce & Associates.

Judging by the fact that RPC, Inc. (NYSE:RES) has faced a declination in interest from the smart money, logic holds that there exists a select few hedge funds that decided to sell off their positions entirely heading into Q4. At the top of the heap, Kyle Bass’s Hayman Advisors dropped the biggest stake of the 700 funds tracked by Insider Monkey, valued at about $14.6 million in stock. Joe DiMenna’s fund, ZWEIG DIMENNA PARTNERS, also dropped its stock, about $5.3 million worth. These transactions are important to note, as total hedge fund interest was cut by 2 funds heading into Q4.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as RPC, Inc. (NYSE:RES) but similarly valued. We will take a look at Crown Media Holdings, Inc (NASDAQ:CRWN), Novavax, Inc. (NASDAQ:NVAX), The Ryland Group, Inc. (NYSE:RYL), and Lexington Realty Trust (NYSE:LXP). This group of stocks’ market valuations are closest to RES’s market valuation.

As you can see these stocks had an average of 18.75 hedge funds with bullish positions and the average amount invested in these stocks was $189 million. That figure was $125 million in RES’s case. Novavax, Inc. (NASDAQ:NVAX) is the most popular stock in this table. On the other hand Crown Media Holdings, Inc (NASDAQ:CRWN) is the least popular one with only 8 bullish hedge fund positions. RPC, Inc. (NYSE:RES) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard NVAX might be a better candidate to consider a long position.