In this article we will take a look at whether hedge funds think Retractable Technologies, Inc. (NYSE:RVP) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is Retractable Technologies (NYSE:RVP) a good stock to buy? RVP was in 5 hedge funds' portfolios at the end of September. The all time high for this statistics is 4. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. RVP shareholders have witnessed an increase in activity from the world's largest hedge funds in recent months. There were 4 hedge funds in our database with RVP holdings at the end of June. Our calculations also showed that RVP 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.
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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 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'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Cliff Asness of AQR Capital Management
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. Now let's take a look at the key hedge fund action encompassing Retractable Technologies, Inc. (NYSE:RVP).
What does smart money think about Retractable Technologies, Inc. (NYSE:RVP)?
At Q3's end, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of 25% from the previous quarter. By comparison, 1 hedge funds held shares or bullish call options in RVP a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Retractable Technologies, Inc. (NYSE:RVP), with a stake worth $10.8 million reported as of the end of September. Trailing Renaissance Technologies was Arrowstreet Capital, which amassed a stake valued at $0.7 million. AQR Capital Management, Citadel Investment Group, and Citadel Investment Group 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 Renaissance Technologies allocated the biggest weight to Retractable Technologies, Inc. (NYSE:RVP), around 0.01% of its 13F portfolio. ExodusPoint Capital is also relatively very bullish on the stock, dishing out 0.0019 percent of its 13F equity portfolio to RVP.
Now, specific money managers have been driving this bullishness. AQR Capital Management, managed by Cliff Asness, established the most valuable position in Retractable Technologies, Inc. (NYSE:RVP). AQR Capital Management had $0.5 million invested in the company at the end of the quarter. Ken Griffin's Citadel Investment Group also made a $0.1 million investment in the stock during the quarter. The only other fund with a brand new RVP position is Michael Gelband's ExodusPoint Capital.
Let's now take a look at hedge fund activity in other stocks similar to Retractable Technologies, Inc. (NYSE:RVP). These stocks are Tuscan Holdings Corp. II (NASDAQ:THCA), Regis Corporation (NYSE:RGS), QEP Resources Inc (NYSE:QEP), Ryerson Holding Corporation (NYSE:RYI), Fulcrum Therapeutics, Inc. (NASDAQ:FULC), Houghton Mifflin Harcourt Co (NASDAQ:HMHC), and P.A.M. Transportation Services, Inc. (NASDAQ:PTSI). This group of stocks' market caps are closest to RVP's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position THCA,8,33185,0 RGS,12,84596,2 QEP,14,21907,-5 RYI,13,10861,0 FULC,10,40391,-1 HMHC,17,58828,-3 PTSI,1,13714,0 Average,10.7,37640,-1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.7 hedge funds with bullish positions and the average amount invested in these stocks was $38 million. That figure was $12 million in RVP's case. Houghton Mifflin Harcourt Co (NASDAQ:HMHC) is the most popular stock in this table. On the other hand P.A.M. Transportation Services, Inc. (NASDAQ:PTSI) is the least popular one with only 1 bullish hedge fund positions. Retractable Technologies, Inc. (NYSE:RVP) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for RVP is 48.5. 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 November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on RVP as the stock returned 73.6% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.
Get real-time email alerts: Follow Retractable Technologies Inc (NYSEMKT:RVP)
Disclosure: None. This article was originally published at Insider Monkey.