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 at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st, a week after the market trough. We are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article we look at how hedge funds traded Renasant Corporation (NASDAQ:RNST) and determine whether the smart money was really smart about this stock.
Hedge fund interest in Renasant Corporation (NASDAQ:RNST) shares was flat at the end of last quarter. This is usually a negative indicator. 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 LTC Properties Inc (NYSE:LTC), International Game Technology PLC (NYSE:IGT), and Helios Technologies, Inc. (NASDAQ:HLIO) to gather more data points. Our calculations also showed that RNST isn't among the 30 most popular stocks among hedge funds (click for Q1 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.
In the eyes of most market participants, hedge funds are seen as underperforming, old investment tools of the past. While there are greater than 8000 funds with their doors open today, We look at the elite of this group, about 850 funds. Most estimates calculate that this group of people command most of the smart money's total asset base, and by keeping track of their inimitable equity investments, Insider Monkey has found a few investment strategies that have historically outperformed the S&P 500 index. Insider Monkey's flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
[caption id="attachment_224708" align="aligncenter" width="397"] New York Stock Exchange[/caption]
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a "weekend trading strategy", so we look into his strategy's picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller's investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let's take a gander at the new hedge fund action encompassing Renasant Corporation (NASDAQ:RNST).
How have hedgies been trading Renasant Corporation (NASDAQ:RNST)?
Heading into the second quarter of 2020, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the fourth quarter of 2019. By comparison, 16 hedge funds held shares or bullish call options in RNST a year ago. With hedge funds' positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Renaissance Technologies, holds the biggest position in Renasant Corporation (NASDAQ:RNST). Renaissance Technologies has a $6.3 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Israel Englander of Millennium Management, with a $3 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other professional money managers that hold long positions encompass D. E. Shaw's D E Shaw, Mark Lee's Forest Hill Capital and Noam Gottesman's GLG Partners. In terms of the portfolio weights assigned to each position Forest Hill Capital allocated the biggest weight to Renasant Corporation (NASDAQ:RNST), around 0.89% of its 13F portfolio. Quantinno Capital is also relatively very bullish on the stock, dishing out 0.24 percent of its 13F equity portfolio to RNST.
Seeing as Renasant Corporation (NASDAQ:RNST) has witnessed falling interest from the entirety of the hedge funds we track, it's safe to say that there exists a select few hedge funds that slashed their entire stakes in the first quarter. Intriguingly, Emanuel J. Friedman's EJF Capital dropped the largest stake of the 750 funds tracked by Insider Monkey, worth close to $6 million in stock. Michael Gelband's fund, ExodusPoint Capital, also dropped its stock, about $1.1 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now review hedge fund activity in other stocks similar to Renasant Corporation (NASDAQ:RNST). These stocks are LTC Properties Inc (NYSE:LTC), International Game Technology PLC (NYSE:IGT), Helios Technologies, Inc. (NASDAQ:HLIO), and State Auto Financial Corporation (NASDAQ:STFC). This group of stocks' market caps are similar to RNST's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LTC,11,25083,1 IGT,25,55994,-5 HLIO,4,53242,-2 STFC,6,8352,1 Average,11.5,35668,-1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.5 hedge funds with bullish positions and the average amount invested in these stocks was $36 million. That figure was $19 million in RNST's case. International Game Technology PLC (NYSE:IGT) is the most popular stock in this table. On the other hand Helios Technologies, Inc. (NASDAQ:HLIO) is the least popular one with only 4 bullish hedge fund positions. Renasant Corporation (NASDAQ:RNST) 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. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th but beat the market by 15.5 percentage points. Unfortunately RNST wasn't nearly as popular as these 10 stocks and hedge funds that were betting on RNST were disappointed as the stock returned 15.1% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.