The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on September 30th. We at Insider Monkey have made an extensive database of nearly 750 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Republic Bancorp, Inc. (NASDAQ:RBCAA) based on those filings.
Is Republic Bancorp, Inc. (NASDAQ:RBCAA) going to take off soon? Investors who are in the know are betting on the stock. The number of bullish hedge fund positions advanced by 1 recently. Our calculations also showed that RBCAA isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
[caption id="attachment_745225" align="aligncenter" width="473"] Noam Gottesman of GLG Partners[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. Let's take a look at the new hedge fund action regarding Republic Bancorp, Inc. (NASDAQ:RBCAA).
How are hedge funds trading Republic Bancorp, Inc. (NASDAQ:RBCAA)?
Heading into the fourth quarter of 2019, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 17% from the previous quarter. On the other hand, there were a total of 7 hedge funds with a bullish position in RBCAA a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Tontine Asset Management held the most valuable stake in Republic Bancorp, Inc. (NASDAQ:RBCAA), which was worth $5.9 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $5 million worth of shares. Winton Capital Management, Millennium Management, and GLG Partners 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 Tontine Asset Management allocated the biggest weight to Republic Bancorp, Inc. (NASDAQ:RBCAA), around 0.84% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, dishing out 0.51 percent of its 13F equity portfolio to RBCAA.
As aggregate interest increased, specific money managers have been driving this bullishness. Winton Capital Management, managed by David Harding, created the most outsized position in Republic Bancorp, Inc. (NASDAQ:RBCAA). Winton Capital Management had $1.6 million invested in the company at the end of the quarter. Ken Griffin's Citadel Investment Group also made a $0.4 million investment in the stock during the quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Republic Bancorp, Inc. (NASDAQ:RBCAA) but similarly valued. We will take a look at The Gorman-Rupp Company (NYSE:GRC), Zealand Pharma A/S (NASDAQ:ZEAL), General American Investors Company, Inc. (NYSE:GAM), and Model N Inc (NYSE:MODN). This group of stocks' market valuations match RBCAA's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GRC,9,43037,2 ZEAL,3,26137,1 GAM,5,27837,0 MODN,18,155372,6 Average,8.75,63096,2.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.75 hedge funds with bullish positions and the average amount invested in these stocks was $63 million. That figure was $15 million in RBCAA's case. Model N Inc (NYSE:MODN) is the most popular stock in this table. On the other hand Zealand Pharma A/S (NASDAQ:ZEAL) is the least popular one with only 3 bullish hedge fund positions. Republic Bancorp, Inc. (NASDAQ:RBCAA) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on RBCAA, though not to the same extent, as the stock returned 6.3% during the first two months of the fourth quarter and outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.