Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track more than 700 prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile gigantic failures like hedge funds’ recent losses in Valeant. Let’s take a closer look at what the funds we track think about Deluxe Corporation (NYSE:DLX) in this article.
Hedge fund interest in Deluxe Corporation shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare DLX to other stocks, including Emcor Group Inc (NYSE:EME), Rayonier Inc. (NYSE:RYN), and BBVA Banco Frances S.A. (ADR) (NYSE:BFR) to get a better sense of its popularity.
Follow Deluxe Corp (NYSE:DLX)
Follow Deluxe Corp (NYSE:DLX)
If you’d ask most traders, hedge funds are assumed to be underperforming, old financial tools of years past. While there are over 8000 funds in operation at the moment, Our experts choose to focus on the moguls of this club, approximately 700 funds. Most estimates calculate that this group of people have their hands on bulk of all hedge funds’ total capital, and by keeping an eye on their inimitable picks, Insider Monkey has unearthed numerous investment strategies that have historically outstripped the market. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
With all of this in mind, we’re going to take a gander at the recent action surrounding Deluxe Corporation (NYSE:DLX).
How have hedgies been trading Deluxe Corporation (NYSE:DLX)?
Heading into Q4, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable 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, Cliff Asness’ AQR Capital Management has the most valuable position in Deluxe Corporation (NYSE:DLX), worth close to $35.7 million, amounting to 0.1% of its total 13F portfolio. On AQR Capital Management’s heels is Joel Greenblatt’s Gotham Asset Management, with a $35.1 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other peers that hold long positions encompass Robert B. Gillam’s McKinley Capital Management, Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group.
Since Deluxe Corporation (NYSE:DLX) has experienced a declination in interest from the aggregate hedge fund industry, it’s safe to say that there is a sect of funds that slashed their full holdings last quarter. Intriguingly, Neil Chriss’ Hutchin Hill Capital dumped the biggest investment of the 700 funds tracked by Insider Monkey, valued at an estimated $2.4 million in stock, and D. E. Shaw’s D E Shaw was right behind this move, as the fund cut about $0.4 million worth of shares. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Deluxe Corporation (NYSE:DLX) but similarly valued. We will take a look at Emcor Group Inc (NYSE:EME), Rayonier Inc. (NYSE:RYN), BBVA Banco Frances S.A. (ADR) (NYSE:BFR), and Ritchie Bros. Auctioneers (USA) (NYSE:RBA). This group of stocks’ market caps match DLX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EME | 23 | 229515 | 3 |
| RYN | 14 | 410087 | -4 |
| BFR | 6 | 37140 | 0 |
| RBA | 24 | 278192 | 9 |
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $239 million, compared to $148 million in DLX’s case. Ritchie Bros. Auctioneers (USA) (NYSE:RBA) is the most popular stock in this table with 24 funds reporting long positions, while BBVA Banco Frances S.A. (ADR) (NYSE:BFR) is the least popular one. Compared to these stocks, Deluxe Corporation (NYSE:DLX) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
