binki Keeps Us on Our Toes with “Revolve”

binki Keeps Us on Our Toes with “Revolve”

binki, the Pennsylvania musician born to Kenyan immigrants, announced his debut EP Motor Function last month with the bass-heavy “Clay Pigeon.” Today, he’s returned with the punk-meets-arcade-game-soundtrack “Revolve.”

The Nate Donmoyer–produced track is a tug-of-war between binki and a force that wants to take it all without reciprocating. His words are playful as he shouts, “Over the moon / My little dipper,” before turning complicated: “Want to erase me / I won’t let it.” A roaring bass anchors the track with a motoric drum machine. Synths howl in the background. It’s all a bit of a rush.

Binki revealed that “Revolve” is “about magnetism. “Opposites attract and all that, but also the opposite is true. For better or worse. What pulls us together and what pushes us apart?” Motor Function is coming August 13 and is described in the press release as a pack of “anti-love songs.”

Hear “Revolve” below.

Why Revolve Stock Surged 24% in June

What happened

Shares of Revolve Group (NYSE:RVLV) spent the first half of the month in a trading range before surging the last two weeks of June. What seemed to send the shares higher was news on June 17 that the stock was set to join the Russell 3000 index effective June 28. By default, Revolve will also be added to the Russell 2000 and Russell 1000 indexes.

Following this news, the shares climbed sharply higher, finishing the month up 24.3%, according to data provided by S&P Global Market Intelligence.

So what

While the addition in the index has no bearing on Revolve’s long-term business performance, it is significant in the very near term, since $10.6 trillion of assets are benchmarked against Russell’s U.S. indexes. This means big financial institutions that oversee various mutual funds and exchange-traded funds that track the Russell indexes have to buy Revolve stock, which can temporarily boost the stock price.

In a statement, Revolve CFO Jesse Timmermans said, “Joining the Russell 3000 Index will increase Revolve’s exposure to the investment community at an exciting time after we delivered record profitability and cash flows in 2020 and returned to strong year-over-year growth in net sales during the first quarter of 2021 as economies began to reopen.”

Now what

Revolve shares have more than doubled year to date and look like a good reopening play. It’s one of the leading online retailers for millennials and Gen Z customers looking for the right attire for social occasions. The stock’s climb this year seemed justified after a strong first-quarter earnings report in May that showed sales increasing by 22% year over year.

While Revolve reported strong demand for dresses and other styles related to social gatherings, it also continued to see strong sales performance from at-home categories, including beauty, intimates, and activewear. This is a great opportunity for Revolve to expand beyond its pre-pandemic niche of fashion apparel and capture a higher share of spending from its customers moving forward.

Hedge Funds Are Crazy About Revolve Group, Inc. (RVLV)

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds' 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Revolve Group, Inc. (NYSE:RVLV) in this article.

Revolve Group, Inc. (NYSE:RVLV) investors should pay attention to an increase in hedge fund sentiment recently. Revolve Group, Inc. (NYSE:RVLV) was in 29 hedge funds' portfolios at the end of March. The all time high for this statistic was previously 24. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 24 hedge funds in our database with RVLV holdings at the end of December. Our calculations also showed that RVLV isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Andrew Sandler of Sandler Capital Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind we’re going to check out the recent hedge fund action surrounding Revolve Group, Inc. (NYSE:RVLV).

Story continues

Do Hedge Funds Think RVLV Is A Good Stock To Buy Now?

Heading into the second quarter of 2021, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 21% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards RVLV over the last 23 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is RVLV A Good Stock To Buy?

Among these funds, Renaissance Technologies held the most valuable stake in Revolve Group, Inc. (NYSE:RVLV), which was worth $51.7 million at the end of the fourth quarter. On the second spot was D E Shaw which amassed $25.9 million worth of shares. Atreides Management, Sandler Capital Management, and CaaS Capital 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 Sandler Capital Management allocated the biggest weight to Revolve Group, Inc. (NYSE:RVLV), around 1.82% of its 13F portfolio. Kamunting Street Capital is also relatively very bullish on the stock, dishing out 0.89 percent of its 13F equity portfolio to RVLV.

As one would reasonably expect, some big names have been driving this bullishness. Sandler Capital Management, managed by Andrew Sandler, assembled the biggest position in Revolve Group, Inc. (NYSE:RVLV). Sandler Capital Management had $21.4 million invested in the company at the end of the quarter. Frank Fu’s CaaS Capital also initiated a $21.2 million position during the quarter. The other funds with new positions in the stock are Alexander Mitchell’s Scopus Asset Management, Andrew Sandler’s Sandler Capital Management, and Michael Rockefeller and KarláKroeker’s Woodline Partners.

Let’s check out hedge fund activity in other stocks similar to Revolve Group, Inc. (NYSE:RVLV). These stocks are Vertex, Inc. (NASDAQ:VERX), Butterfly Network, Inc. (NYSE:BFLY), Summit Materials Inc (NYSE:SUM), Camping World Holdings, Inc. (NYSE:CWH), Onto Innovation Inc. (NYSE:ONTO), Terex Corporation (NYSE:TEX), and Brookfield Business Partners L.P. (NYSE:BBU). All of these stocks' market caps are similar to RVLV’s market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VERX,11,40913,0 BFLY,32,299537,32 SUM,32,198758,1 CWH,24,325789,-3 ONTO,18,297070,-1 TEX,31,501779,8 BBU,3,6237,0 Average,21.6,238583,5.3 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 21.6 hedge funds with bullish positions and the average amount invested in these stocks was $239 million. That figure was $257 million in RVLV’s case. Butterfly Network, Inc. (NYSE:BFLY) is the most popular stock in this table. On the other hand Brookfield Business Partners L.P. (NYSE:BBU) is the least popular one with only 3 bullish hedge fund positions. Revolve Group, Inc. (NYSE:RVLV) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for RVLV is 84.8. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 22.8% in 2021 through July 2nd and still beat the market by 6 percentage points. Hedge funds were also right about betting on RVLV as the stock returned 61.1% since the end of Q1 (through 7/2) 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.