The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded Dicks Sporting Goods Inc (NYSE:DKS) and determine whether the smart money was really smart about this stock.
Dicks Sporting Goods Inc (NYSE:DKS) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 36 hedge funds’ portfolios at the end of September. Our calculations also showed that DKS isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as GDS Holdings Limited (NASDAQ:GDS), Cemex SAB de CV (NYSE:CX), and Ozon Holdings PLC (NASDAQ:OZON) to gather more data points.
Robert Pohly of Samlyn Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Keeping this in mind let’s take a gander at the fresh hedge fund action encompassing Dicks Sporting Goods Inc (NYSE:DKS).
Do Hedge Funds Think DKS Is A Good Stock To Buy Now?
At Q3’s end, a total of 36 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 41 hedge funds with a bullish position in DKS a year ago. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Israel Englander’s Millennium Management has the number one position in Dicks Sporting Goods Inc (NYSE:DKS), worth close to $404.6 million, accounting for 0.2% of its total 13F portfolio. Sitting at the No. 2 spot is Atreides Management, led by Gavin Baker, holding a $386.6 million position; 9.1% of its 13F portfolio is allocated to the stock. Other members of the smart money with similar optimism encompass Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Robert Pohly’s Samlyn Capital and Douglas Dossey and Arthur Young’s Tensile Capital. In terms of the portfolio weights assigned to each position Atreides Management allocated the biggest weight to Dicks Sporting Goods Inc (NYSE:DKS), around 9.13% of its 13F portfolio. Tensile Capital is also relatively very bullish on the stock, setting aside 8.8 percent of its 13F equity portfolio to DKS.
Since Dicks Sporting Goods Inc (NYSE:DKS) has faced falling interest from hedge fund managers, it’s easy to see that there lies a certain “tier” of hedgies that decided to sell off their full holdings in the third quarter. It’s worth mentioning that Andy Redleaf’s Whitebox Advisors cut the biggest investment of all the hedgies watched by Insider Monkey, worth an estimated $41.4 million in stock, and Ken Heebner’s Capital Growth Management was right behind this move, as the fund dropped about $36.1 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Dicks Sporting Goods Inc (NYSE:DKS) but similarly valued. We will take a look at GDS Holdings Limited (NASDAQ:GDS), Cemex SAB de CV (NYSE:CX), Ozon Holdings PLC (NASDAQ:OZON), Regal Beloit Corporation (NYSE:RBC), Acceleron Pharma Inc (NASDAQ:XLRN), Global-E Online Ltd. (NASDAQ:GLBE), and Natera Inc (NASDAQ:NTRA). All of these stocks’ market caps match DKS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GDS | 24 | 1018195 | -14 |
| CX | 19 | 438842 | -4 |
| OZON | 13 | 203434 | -6 |
| RBC | 30 | 526548 | -1 |
| XLRN | 58 | 2613991 | 15 |
| GLBE | 22 | 1002171 | 22 |
| NTRA | 50 | 1800268 | -2 |
| Average | 30.9 | 1086207 | 1.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.9 hedge funds with bullish positions and the average amount invested in these stocks was $1086 million. That figure was $1616 million in DKS’s case. Acceleron Pharma Inc (NASDAQ:XLRN) is the most popular stock in this table. On the other hand Ozon Holdings PLC (NASDAQ:OZON) is the least popular one with only 13 bullish hedge fund positions. Dicks Sporting Goods Inc (NYSE:DKS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for DKS is 55.1. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately, DKS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on DKS were disappointed as the stock returned -3.3% since the end of September (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.
Follow Dick's Sporting Goods Inc. (NYSE:DKS)
Follow Dick's Sporting Goods Inc. (NYSE:DKS)
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Disclosure: None. This article was originally published at Insider Monkey.
