Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Raven Industries, Inc. (NASDAQ:RAVN).
Raven Industries, Inc. (NASDAQ:RAVN) was in 16 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 16. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. RAVN shareholders have witnessed an increase in hedge fund interest lately. There were 14 hedge funds in our database with RAVN positions at the end of the fourth quarter. Our calculations also showed that RAVN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Bruce Kovner of Caxton Associates LP
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to take a peek at the recent hedge fund action encompassing Raven Industries, Inc. (NASDAQ:RAVN).
Do Hedge Funds Think RAVN Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 14% from the fourth quarter of 2020. By comparison, 11 hedge funds held shares or bullish call options in RAVN a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, ARK Investment Management held the most valuable stake in Raven Industries, Inc. (NASDAQ:RAVN), which was worth $53.9 million at the end of the fourth quarter. On the second spot was Royce & Associates which amassed $14.5 million worth of shares. Renaissance Technologies, Arrowstreet Capital, and GAMCO Investors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Horseman Capital Management allocated the biggest weight to Raven Industries, Inc. (NASDAQ:RAVN), around 1.6% of its 13F portfolio. Roubaix Capital is also relatively very bullish on the stock, earmarking 0.95 percent of its 13F equity portfolio to RAVN.
As one would reasonably expect, key money managers were leading the bulls’ herd. Millennium Management, managed by Israel Englander, assembled the most valuable position in Raven Industries, Inc. (NASDAQ:RAVN). Millennium Management had $2.1 million invested in the company at the end of the quarter. John Horseman’s Horseman Capital Management also initiated a $2 million position during the quarter. The following funds were also among the new RAVN investors: Paul Marshall and Ian Wace’s Marshall Wace LLP, Greg Eisner’s Engineers Gate Manager, and Bruce Kovner’s Caxton Associates LP.
Let’s check out hedge fund activity in other stocks similar to Raven Industries, Inc. (NASDAQ:RAVN). We will take a look at e.l.f. Beauty, Inc. (NYSE:ELF), Calavo Growers, Inc. (NASDAQ:CVGW), H&E Equipment Services, Inc. (NASDAQ:HEES), Ouster, Inc. (NYSE:OUST), 17 Education & Technology Group Inc. (NASDAQ:YQ), Ebang International Holdings Inc. (NASDAQ:EBON), and FBL Financial Group (NYSE:FFG). This group of stocks’ market values match RAVN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ELF | 21 | 138769 | -8 |
| CVGW | 9 | 64050 | -1 |
| HEES | 14 | 67670 | -3 |
| OUST | 19 | 129618 | 19 |
| YQ | 7 | 7440 | -6 |
| EBON | 8 | 9048 | 5 |
| FFG | 7 | 19941 | -1 |
| Average | 12.1 | 62362 | 0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.1 hedge funds with bullish positions and the average amount invested in these stocks was $62 million. That figure was $98 million in RAVN’s case. e.l.f. Beauty, Inc. (NYSE:ELF) is the most popular stock in this table. On the other hand 17 Education & Technology Group Inc. (NASDAQ:YQ) is the least popular one with only 7 bullish hedge fund positions. Raven Industries, Inc. (NASDAQ:RAVN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for RAVN is 69.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.5% in 2021 through July 23rd and still beat the market by 10.1 percentage points. Hedge funds were also right about betting on RAVN as the stock returned 53.1% since the end of Q1 (through 7/23) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Raven Industries Inc (NASDAQ:RAVN)
Follow Raven Industries Inc (NASDAQ:RAVN)
Suggested Articles:
- 10 Best Electric Utility Stocks To Buy
- 10 Best Mexican Stocks To Buy Now
- 10 Best Self Driving Car Stocks to Invest In
Disclosure: None. This article was originally published at Insider Monkey.
