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With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was Rimini Street, Inc. (NASDAQ:RMNI).
Is RMNI a good stock to buy now? The smart money was betting on the stock. The number of bullish hedge fund bets improved by 1 lately. Rimini Street, Inc. (NASDAQ:RMNI) was in 9 hedge funds' portfolios at the end of September. The all time high for this statistics is 9. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that RMNI 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). There were 8 hedge funds in our database with RMNI holdings at the end of June.
Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most traders, hedge funds are viewed as worthless, outdated financial tools of years past. While there are more than 8000 funds trading today, Our experts choose to focus on the top tier of this group, about 850 funds. These hedge fund managers command the lion's share of the smart money's total capital, and by keeping an eye on their highest performing investments, Insider Monkey has formulated various investment strategies that have historically outstripped the market. Insider Monkey's flagship short hedge fund strategy outstripped 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 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
J. Carlo Cannell of Cannell Capital
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 we're going to take a glance at the fresh hedge fund action regarding Rimini Street, Inc. (NASDAQ:RMNI).
Do Hedge Funds Think RMNI Is A Good Stock To Buy Now?
At Q3's end, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards RMNI over the last 21 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
More specifically, Adams Street Partners was the largest shareholder of Rimini Street, Inc. (NASDAQ:RMNI), with a stake worth $76.3 million reported as of the end of September. Trailing Adams Street Partners was Voss Capital, which amassed a stake valued at $6.7 million. Cannell Capital, Nokomis Capital, and Renaissance Technologies 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 Adams Street Partners allocated the biggest weight to Rimini Street, Inc. (NASDAQ:RMNI), around 20.11% of its 13F portfolio. Voss Capital is also relatively very bullish on the stock, earmarking 3.82 percent of its 13F equity portfolio to RMNI.
Consequently, key money managers have jumped into Rimini Street, Inc. (NASDAQ:RMNI) headfirst. Engineers Gate Manager, managed by Greg Eisner, assembled the most valuable position in Rimini Street, Inc. (NASDAQ:RMNI). Engineers Gate Manager had $0.1 million invested in the company at the end of the quarter. Peter Algert's Algert Global also initiated a $0.1 million position during the quarter.
Let's go over hedge fund activity in other stocks similar to Rimini Street, Inc. (NASDAQ:RMNI). We will take a look at NextCure, Inc. (NASDAQ:NXTC), Fidus Investment Corp (NASDAQ:FDUS), ProQR Therapeutics NV (NASDAQ:PRQR), The Marcus Corporation (NYSE:MCS), Greenlight Capital Re, Ltd. (NASDAQ:GLRE), Preformed Line Products Company (NASDAQ:PLPC), and Sierra Metals Inc. (NYSE:SMTS). This group of stocks' market caps are similar to RMNI's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NXTC,13,54862,-3 FDUS,5,6368,1 PRQR,5,39417,-2 MCS,13,14607,0 GLRE,4,1004,-2 PLPC,5,20457,-2 SMTS,3,1279,1 Average,6.9,19713,-1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.9 hedge funds with bullish positions and the average amount invested in these stocks was $20 million. That figure was $99 million in RMNI's case. NextCure, Inc. (NASDAQ:NXTC) is the most popular stock in this table. On the other hand Sierra Metals Inc. (NYSE:SMTS) is the least popular one with only 3 bullish hedge fund positions. Rimini Street, Inc. (NASDAQ:RMNI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for RMNI is 66. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. Hedge funds were also right about betting on RMNI as the stock returned 47.5% since the end of Q3 (through 12/8) 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.