Published on 20 Jul 2021 on Insider Monkey via Yahoo Finance

Hedge Funds Are Coming Back To Renewable Energy Group Inc (REGI)

Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don't make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards Renewable Energy Group Inc (NASDAQ:REGI) to find out whether there were any major changes in hedge funds' views.

Is Renewable Energy Group Inc (NASDAQ:REGI) the right pick for your portfolio? Prominent investors were becoming more confident. The number of long hedge fund bets rose by 5 lately. Renewable Energy Group Inc (NASDAQ:REGI) was in 21 hedge funds' portfolios at the end of March. The all time high for this statistic is 30. Our calculations also showed that REGI isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 16 hedge funds in our database with REGI positions at the end of the fourth quarter.

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.