Do Hedge Funds Love DuPont de Nemours Inc (DD)?

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 have processed the filings of the more than 873 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their June 30th holdings, data that is available nowhere else. Should you consider DuPont de Nemours Inc (NYSE:DD) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

DuPont de Nemours Inc (NYSE:DD) has seen an increase in hedge fund sentiment in recent months. DuPont de Nemours Inc (NYSE:DD) was in 57 hedge funds’ portfolios at the end of June. The all time high for this statistic is 82. Our calculations also showed that DD isn’t among the 30 most popular stocks among hedge funds (click for Q2 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 79 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.

Larry Robbins of Glenview Capital

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. Keeping this in mind we’re going to view the new hedge fund action surrounding DuPont de Nemours Inc (NYSE:DD).

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

At the end of the second quarter, a total of 57 of the hedge funds tracked by Insider Monkey were long this stock, a change of 16% from the previous quarter. On the other hand, there were a total of 64 hedge funds with a bullish position in DD a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

The largest stake in DuPont de Nemours Inc (NYSE:DD) was held by 40 North Management, which reported holding $447 million worth of stock at the end of June. It was followed by Third Point with a $230.3 million position. Other investors bullish on the company included Arrowstreet Capital, D E Shaw, and Glenview Capital. In terms of the portfolio weights assigned to each position SAYA Management allocated the biggest weight to DuPont de Nemours Inc (NYSE:DD), around 10.61% of its 13F portfolio. 40 North Management is also relatively very bullish on the stock, setting aside 10.35 percent of its 13F equity portfolio to DD.

Now, key money managers have jumped into DuPont de Nemours Inc (NYSE:DD) headfirst. TwinBeech Capital, managed by Jinghua Yan, initiated the most outsized position in DuPont de Nemours Inc (NYSE:DD). TwinBeech Capital had $8.1 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also made a $7.4 million investment in the stock during the quarter. The other funds with brand new DD positions are Michael Gelband’s ExodusPoint Capital, Paul Tudor Jones’s Tudor Investment Corp, and Zilvinas Mecelis’s Covalis Capital.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as DuPont de Nemours Inc (NYSE:DD) but similarly valued. These stocks are Electronic Arts Inc. (NASDAQ:EA), American International Group Inc (NYSE:AIG), Barclays PLC (NYSE:BCS), Microchip Technology Incorporated (NASDAQ:MCHP), Amphenol Corporation (NYSE:APH), Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN), and Baxter International Inc. (NYSE:BAX). All of these stocks’ market caps are similar to DD’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 44.3 hedge funds with bullish positions and the average amount invested in these stocks was $2888 million. That figure was $1653 million in DD’s case. Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) is the most popular stock in this table. On the other hand Barclays PLC (NYSE:BCS) is the least popular one with only 11 bullish hedge fund positions. DuPont de Nemours Inc (NYSE:DD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for DD is 70.5. 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 25.7% in 2021 through September 27th and beat the market again by 6.2 percentage points. Unfortunately DD wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on DD were disappointed as the stock returned -9.1% since the end of June (through 9/27) 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 many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.