What Do Hedge Funds Think of Relypsa Inc (RLYP)?

The government requires hedge funds and wealthy investors with over a certain portfolio size to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings discloses the funds’ positions on September 30. We at Insider Monkey have made an extensive database of more than 700 of those elite funds and prominent investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Relypsa Inc (NASDAQ:RLYP) based on those filings.

Relypsa Inc (NASDAQ:RLYP) was in 25 hedge funds’ portfolios at the end of the third quarter of 2015. RLYP investors should pay attention to a decrease in hedge fund interest of late. There were 28 hedge funds in our database with RLYP positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Inter Parfums, Inc. (NASDAQ:IPAR), K2M Group Holdings Inc (NASDAQ:KTWO), and James River Group Holdings Ltd (NASDAQ:JRVR) to gather more data points.

If you’d ask most stock holders, hedge funds are assumed to be unimportant, old investment tools of the past. While there are over 8,000 funds in operation at the moment, Our experts choose to focus on the top tier of this club, about 700 funds. These hedge fund managers manage the lion’s share of all hedge funds’ total capital, and by watching their finest picks, Insider Monkey has identified numerous investment strategies that have historically beaten the market. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points per year for a decade in their back tests.

Keeping this in mind, let’s review the new action surrounding Relypsa Inc (NASDAQ:RLYP).

What have hedge funds been doing with Relypsa Inc (NASDAQ:RLYP)?

At Q3’s end, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -11% from the previous quarter. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, OrbiMed Advisors, managed by Samuel Isaly, holds the biggest position in Relypsa Inc (NASDAQ:RLYP). OrbiMed Advisors has a $137 million position in the stock, comprising 1.4% of its 13F portfolio. Sitting at the No. 2 spot is JHL Capital Group, led by James H. Litinsky, holding a $33.3 million position; 3.7% of its 13F portfolio is allocated to the stock. Other professional money managers that hold long positions consist of James E. Flynn’s Deerfield Management, Joseph Edelman’s Perceptive Advisors and Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management.

Since Relypsa Inc (NASDAQ:RLYP) has witnessed a declination in interest from hedge fund managers, it’s safe to say that there was a specific group of fund managers who sold off their entire stakes heading into Q4. Interestingly, Matt Sirovich and Jeremy Mindich’s Scopia Capital said goodbye to the biggest investment of the “upper crust” of funds followed by Insider Monkey, comprising an estimated $12.4 million in stock. Zach Schreiber’s fund, Point State Capital, also dropped its stock, about $9.9 million worth. These transactions are interesting, as total hedge fund interest was cut by 3 funds heading into Q4.

Let’s go over hedge fund activity in other stocks similar to Relypsa Inc (NASDAQ:RLYP). These stocks are Inter Parfums, Inc. (NASDAQ:IPAR), K2M Group Holdings Inc (NASDAQ:KTWO), James River Group Holdings Ltd (NASDAQ:JRVR), and Kforce Inc. (NASDAQ:KFRC). This group of stocks’ market caps are similar to RLYP’s market cap.

As you can see these stocks had an average of 12.5 hedge funds with bullish positions and the average amount invested in these stocks was $146 million. That figure was $311 million in RLYP’s case. Kforce Inc. (NASDAQ:KFRC) is the most popular stock in this table. On the other hand Inter Parfums, Inc. (NASDAQ:IPAR) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Relypsa Inc (NASDAQ:RLYP) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.