We can judge whether Dr Pepper Snapple Group Inc. (NYSE:DPS) 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.
Dr Pepper Snapple Group Inc. was in 29 hedge funds’ portfolios at the end of the third quarter of 2015. DPS has seen a decrease in enthusiasm from smart money in recent months. There were 37 hedge funds in our database with DPS positions at the end of the previous quarter. 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 BRF Brasil Foods SA (ADR) (NYSE:BRFS), Grupo Televisa SAB (ADR) (NYSE:TV), and Viacom, Inc. (NASDAQ:VIAB) to gather more data points.
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Keeping this in mind, let’s view the key action regarding Dr Pepper Snapple Group Inc. (NYSE:DPS).
How have hedgies been trading Dr Pepper Snapple Group Inc. (NYSE:DPS)?
At Q3’s end, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a change of -22% from the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Cedar Rock Capital, managed by Andy Brown, holds the largest position in Dr Pepper Snapple Group Inc. (NYSE:DPS). Cedar Rock Capital has a $959.9 million position in the stock, comprising 24.9% of its 13F portfolio. Sitting at the No. 2 spot is Cliff Asness of AQR Capital Management, with a $222.4 million position; 0.4% of its 13F portfolio is allocated to the company. Some other professional money managers that hold long positions include Mario Gabelli’s GAMCO Investors, Ken Griffin’s Citadel Investment Group and Israel Englander’s Millennium Management.
Since Dr Pepper Snapple Group Inc. (NYSE:DPS) has experienced falling interest from the aggregate hedge fund industry, we can see that there were a few funds that slashed their full holdings last quarter. Interestingly, Matthew Tewksbury’s Stevens Capital Management cut the largest investment of the 700 funds followed by Insider Monkey, valued at close to $8.2 million in stock. Peter Muller’s fund, PDT Partners, also sold off its stock, about $7.7 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 8 funds last quarter.
Let’s go over hedge fund activity in other stocks similar to Dr Pepper Snapple Group Inc. (NYSE:DPS). These stocks are BRF Brasil Foods SA (ADR) (NYSE:BRFS), Grupo Televisa SAB (ADR) (NYSE:TV), Viacom, Inc. (NASDAQ:VIAB), and Stanley Black & Decker, Inc. (NYSE:SWK). All of these stocks’ market caps are similar to DPS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BRFS | 11 | 315092 | -2 |
| TV | 24 | 2001959 | -1 |
| VIAB | 35 | 1266411 | -12 |
| SWK | 32 | 990446 | 1 |
As you can see these stocks had an average of 25.5 hedge funds with bullish positions and the average amount invested in these stocks was $1,143 million. That figure was $1,711 million in DPS’s case. Viacom, Inc. (NASDAQ:VIAB) is the most popular stock in this table. On the other hand BRF Brasil Foods SA (ADR) (NYSE:BRFS) is the least popular one with only 11 bullish hedge fund positions. Dr Pepper Snapple Group Inc. (NYSE:DPS) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard VIAB might be a better candidate to consider a long position.
