HD Supply Holdings Inc (HDS): Hedge Funds Are Snapping Up

As we already know from media reports and hedge fund investor letters, many hedge funds lost money in the third quarter, blaming macroeconomic conditions and unpredictable events that hit several sectors, with healthcare among them. Nevertheless, most investors decided to stick to their bullish theses and their long-term focus allows us to profit from the recent declines. In particular, let’s take a look at what hedge funds think about HD Supply Holdings Inc (NASDAQ:HDS) in this article.

HD Supply Holdings Inc (NASDAQ:HDS) was in 54 hedge funds’ portfolios at the end of September. HDS has experienced an increase in hedge fund interest of late. There were 40 hedge funds in our database with HDS 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 Carlisle Companies, Inc. (NYSE:CSL), Marine Harvest ASA (NYSE:MHG), and Leggett & Platt, Inc. (NYSE:LEG) to gather more data points.

In the 21st century investor’s toolkit there are tons of formulas shareholders use to appraise their stock investments. Two of the most useful formulas are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the best picks of the elite hedge fund managers can beat the broader indices by a very impressive amount (see the details here).

Now, we’re going to go over the key action encompassing HD Supply Holdings Inc (NASDAQ:HDS).

How have hedgies been trading HD Supply Holdings Inc (NASDAQ:HDS)?

At the end of the third quarter, a total of 54 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 35% from the second quarter. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes substantially (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, John Griffin’s Blue Ridge Capital has the largest position in HD Supply Holdings Inc (NASDAQ:HDS), worth close to $181.9 million, corresponding to 2.1% of its total 13F portfolio. The second largest stake is held by Farallon Capital, managed by Thomas Steyer, which holds a $109.8 million position; the fund has 1.5% of its 13F portfolio invested in the stock. Other peers that hold long positions comprise D. E. Shaw’s D E Shaw, Robert Pohly’s Samlyn Capital and Ken Griffin’s Citadel Investment Group.

As aggregate interest increased, some big names were breaking ground themselves. Adage Capital Management, managed by Phill Gross and Robert Atchinson, assembled the biggest position in HD Supply Holdings Inc (NASDAQ:HDS). According to its latest quarterly report, the fund had $22.9 million invested in the company at the end of September. David Keidan’s Buckingham Capital Management also made a $20.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Jacob Gottlieb’s Visium Asset Management, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Michael Platt and William Reeves’s BlueCrest Capital Mgmt..

Let’s now take a look at hedge fund activity in other stocks similar to HD Supply Holdings Inc (NASDAQ:HDS). These stocks are Carlisle Companies, Inc. (NYSE:CSL), Marine Harvest ASA (NYSE:MHG), Leggett & Platt, Inc. (NYSE:LEG), and Brookfield Property Partners LP (NYSE:BPY). This group of stocks’ market valuations are similar to HDS’s market valuation.

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $81 million. Carlisle Companies, Inc. (NYSE:CSL) is the most popular stock in this table. On the other hand Marine Harvest ASA (NYSE:MHG) is the least popular one with only 4 bullish hedge fund positions. With 54 long hedge fund positions, HD Supply Holdings Inc (NASDAQ:HDS) clearly outshines the lot, having also attracted some $1.27 billion of the hedgies’ money. Taking it all into consideration, we believe it may be a good idea to analyze it in detail and potentially include it in your portfolio.