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The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 866 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31st holdings, data that is available nowhere else. Should you consider RiceBran Technologies (NASDAQ:RIBT) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Hedge fund interest in RiceBran Technologies (NASDAQ:RIBT) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that RIBT isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). 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 Hudson Global Inc (NASDAQ:HSON), Willamette Valley Vineyards, Inc. (NASDAQ:WVVI), and Hoth Therapeutics, Inc. (NASDAQ:HOTH) to gather more data points.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Chuck Royce of Royce & Associates
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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. Keeping this in mind we're going to view the recent hedge fund action surrounding RiceBran Technologies (NASDAQ:RIBT).
Do Hedge Funds Think RIBT Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards RIBT over the last 23 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Roumell Asset Management, managed by Jim Roumell, holds the biggest position in RiceBran Technologies (NASDAQ:RIBT). Roumell Asset Management has a $3.8 million position in the stock, comprising 5.4% of its 13F portfolio. The second most bullish fund manager is Dov Gertzulin of DG Capital Management, with a $0.9 million position; 0.2% of its 13F portfolio is allocated to the stock. Other professional money managers that are bullish comprise Renaissance Technologies, Ken Griffin's Citadel Investment Group and Israel Englander's Millennium Management. In terms of the portfolio weights assigned to each position Roumell Asset Management allocated the biggest weight to RiceBran Technologies (NASDAQ:RIBT), around 5.44% of its 13F portfolio. DG Capital Management is also relatively very bullish on the stock, setting aside 0.22 percent of its 13F equity portfolio to RIBT.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Royce & Associates. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Millennium Management).
Let's now review hedge fund activity in other stocks similar to RiceBran Technologies (NASDAQ:RIBT). These stocks are Hudson Global Inc (NASDAQ:HSON), Willamette Valley Vineyards, Inc. (NASDAQ:WVVI), Hoth Therapeutics, Inc. (NASDAQ:HOTH), Acer Therapeutics Inc. (NASDAQ:ACER), A. H. Belo Corporation (NYSE:AHC), Global Self Storage, Inc. (NASDAQ:SELF), and Lixte Biotechnology Holdings, Inc. (NASDAQ:LIXT). This group of stocks' market valuations are similar to RIBT's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position HSON,1,1673,0 WVVI,2,1462,1 HOTH,3,5064,0 ACER,3,3167,-1 AHC,6,4126,1 SELF,1,330,0 LIXT,2,469,1 Average,2.6,2327,0.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 2.6 hedge funds with bullish positions and the average amount invested in these stocks was $2 million. That figure was $5 million in RIBT's case. A. H. Belo Corporation (NYSE:AHC) is the most popular stock in this table. On the other hand Hudson Global Inc (NASDAQ:HSON) is the least popular one with only 1 bullish hedge fund positions. RiceBran Technologies (NASDAQ:RIBT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for RIBT is 70. 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 17.4% in 2021 through June 18th and still beat the market by 6.1 percentage points. Hedge funds were also right about betting on RIBT, though not to the same extent, as the stock returned 8.1% since Q1 (through June 18th) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.