What Do Hedge Funds Think of ReTailMeNot Inc (SALE)?

The elite funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at ReTailMeNot Inc (NASDAQ:SALE) from the perspective of those elite funds.

ReTailMeNot Inc (NASDAQ:SALE) investors should pay attention to a decrease in activity from the world’s largest hedge funds lately. SALE was in 15 hedge funds’ portfolios at the end of September. There were 21 hedge funds in our database with SALE holdings at the end of the previous quarter. At the end of this article we will also compare SALE to other stocks including Sunedison Semiconductor Ltd (NASDAQ:SEMI), Fred’s, Inc. (NASDAQ:FRED), and Global Brass and Copper Holdings Inc (NYSE:BRSS) to get a better sense of its popularity.

Keeping this in mind, let’s take a look at the new action surrounding ReTailMeNot Inc (NASDAQ:SALE).

What have hedge funds been doing with ReTailMeNot Inc (NASDAQ:SALE)?

At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -29% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Scopia Capital, managed by Matt Sirovich and Jeremy Mindich, holds the largest position in ReTailMeNot Inc (NASDAQ:SALE). Scopia Capital has an $57 million position in the stock, comprising 1.2% of its 13F portfolio. The second most bullish fund manager is Renaissance Technologies, led by Jim Simons, holding an $9.1 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism comprise Joel Greenblatt’s Gotham Asset Management, D E Shaw and John Overdeck and David Siegel’s Two Sigma Advisors.

Judging by the fact that ReTailMeNot Inc (NASDAQ:SALE) has faced declining sentiment from hedge fund managers, logic holds that there were a few money managers who sold off their positions entirely in the third quarter. Intriguingly, James A. Noonan’s Pivot Point Capital cut the biggest position of the 700 funds followed by Insider Monkey, totaling an estimated $9.2 million in stock. Brian Taylor’s fund, Pine River Capital Management, also said goodbye to its stock, about $6.4 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 6 funds in the third quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as ReTailMeNot Inc (NASDAQ:SALE) but similarly valued. We will take a look at Sunedison Semiconductor Ltd (NASDAQ:SEMI), Fred’s, Inc. (NASDAQ:FRED), Global Brass and Copper Holdings Inc (NYSE:BRSS), and San Juan Basin Royalty Trust (NYSE:SJT). This group of stocks’ market valuations are similar to SALE’s market valuation.

As you can see these stocks had an average of 13.5 hedge funds with bullish positions and the average amount invested in these stocks was $79 million. That figure was $80 million in SALE’s case. Sunedison Semiconductor Ltd (NASDAQ:SEMI) is the most popular stock in this table. On the other hand Fred’s, Inc. (NASDAQ:FRED) is the least popular one with only 5 bullish hedge fund positions. ReTailMeNot Inc (NASDAQ:SALE) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SEMI might be a better candidate to consider a long position.