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At Insider Monkey, we pore over the filings of nearly 817 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we've gathered as a result gives us access to a wealth of collective knowledge based on these firms' portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Raven Industries, Inc. (NASDAQ:RAVN) makes for a good investment right now.
Is RAVN a good stock to buy now? Hedge funds were betting on the stock. The number of long hedge fund positions advanced by 3 lately. Raven Industries, Inc. (NASDAQ:RAVN) was in 16 hedge funds' portfolios at the end of September. The all time high for this statistic is 15. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that RAVN isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are a lot of gauges market participants employ to assess stocks. Some of the most innovative gauges are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the top picks of the best investment managers can trounce their index-focused peers by a very impressive margin (see the details here).
Noam Gottesman of GLG Partners
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. With all of this in mind we're going to take a glance at the recent hedge fund action regarding Raven Industries, Inc. (NASDAQ:RAVN).
Do Hedge Funds Think RAVN Is A Good Stock To Buy Now?
At the end of September, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 23% from the previous quarter. On the other hand, there were a total of 12 hedge funds with a bullish position in RAVN a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Raven Industries, Inc. (NASDAQ:RAVN) was held by Royce & Associates, which reported holding $43.3 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $11.4 million position. Other investors bullish on the company included Arrowstreet Capital, GLG Partners, and D E Shaw. In terms of the portfolio weights assigned to each position Harvey Partners allocated the biggest weight to Raven Industries, Inc. (NASDAQ:RAVN), around 1.48% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, designating 0.47 percent of its 13F equity portfolio to RAVN.
As aggregate interest increased, specific money managers were breaking ground themselves. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, established the largest position in Raven Industries, Inc. (NASDAQ:RAVN). Marshall Wace LLP had $1.2 million invested in the company at the end of the quarter. Jeffrey Moskowitz's Harvey Partners also initiated a $1.1 million position during the quarter. The only other fund with a brand new RAVN position is Michael Gelband's ExodusPoint Capital.
Let's also examine hedge fund activity in other stocks similar to Raven Industries, Inc. (NASDAQ:RAVN). These stocks are Ingles Markets, Incorporated (NASDAQ:IMKTA), Bright Scholar Education Holdings Limited (NYSE:BEDU), The Gorman-Rupp Company (NYSE:GRC), Magnite Inc. (NASDAQ:MGNI), Oric Pharmaceuticals, Inc. (NASDAQ:ORIC), GrowGeneration Corp. (NASDAQ:GRWG), and Cincinnati Bell Inc. (NYSE:CBB). This group of stocks' market valuations match RAVN's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position IMKTA,16,71020,0 BEDU,7,72807,0 GRC,10,37246,0 MGNI,25,143850,1 ORIC,10,173916,-1 GRWG,10,56404,-1 CBB,16,134906,1 Average,13.4,98593,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.4 hedge funds with bullish positions and the average amount invested in these stocks was $99 million. That figure was $79 million in RAVN's case. Magnite Inc. (NASDAQ:MGNI) is the most popular stock in this table. On the other hand Bright Scholar Education Holdings Limited (NYSE:BEDU) 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 63. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on RAVN as the stock returned 55.4% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.