We can judge whether DDR Corp (NYSE:DDR) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, research shows that these picks historically outperformed the market when we factor in known risk factors.
DDR Corp (NYSE:DDR) has experienced an increase in hedge fund sentiment in recent months. DDR was in 18 hedge funds’ portfolios at the end of the third quarter of 2016. There were 16 hedge funds in our database with DDR positions at the end of the previous quarter. At the end of this article we will also compare DDR to other stocks including EnCana Corporation (USA) (NYSE:ECA), DexCom, Inc. (NASDAQ:DXCM), and New Oriental Education & Tech Grp (ADR) (NYSE:EDU) to get a better sense of its popularity.
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How are hedge funds trading DDR Corp (NYSE:DDR)?
Heading into the fourth quarter of 2016, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 13% from the previous quarter, and the third-straight quarter with a gain. Below, you can check out the change in hedge fund sentiment towards DDR over the last 5 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.
When looking at the institutional investors followed by Insider Monkey, Jeffrey Furber’s AEW Capital Management has the biggest position in DDR Corp (NYSE:DDR), worth close to $56.4 million, accounting for 1.2% of its total 13F portfolio. The second largest stake is held by Jim Simons’ Renaissance Technologies, which holds a $32.7 million position. Other professional money managers that are bullish include John Overdeck and David Siegel’s Two Sigma Advisors, Israel Englander’s Millennium Management, and Ken Griffin’s Citadel Investment Group. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
As one would reasonably expect, specific money managers have jumped into DDR Corp (NYSE:DDR) headfirst. AEW Capital Management created the biggest position in DDR Corp (NYSE:DDR). Greg Poole’s Echo Street Capital Management also made a $4.2 million investment in the stock during the quarter. The following funds were also among the new DDR investors: Ray Dalio’s Bridgewater Associates and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as DDR Corp (NYSE:DDR) but similarly valued. We will take a look at EnCana Corporation (USA) (NYSE:ECA), DexCom, Inc. (NASDAQ:DXCM), New Oriental Education & Tech Grp (ADR) (NYSE:EDU), and Hyatt Hotels Corporation (NYSE:H). This group of stocks’ market valuations resemble DDR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ECA | 37 | 2159354 | 11 |
| DXCM | 26 | 300295 | 1 |
| EDU | 20 | 288666 | 0 |
| H | 23 | 293258 | 5 |
As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $760 million. That figure was $207 million in DDR’s case. EnCana Corporation (USA) (NYSE:ECA) is the most popular stock in this table. On the other hand New Oriental Education & Tech Grp (ADR) (NYSE:EDU) is the least popular one with only 20 bullish hedge fund positions. Compared to these stocks DDR Corp (NYSE:DDR) is even less popular than EDU. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
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