Here is What Hedge Funds Think About Dover Motorsports, Inc. (DVD)

In this article we are going to use hedge fund sentiment as a tool and determine whether Dover Motorsports, Inc. (NYSE:DVD) is a good investment right now. We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.

Dover Motorsports, Inc. (NYSE:DVD) investors should be aware of an increase in hedge fund sentiment lately. Dover Motorsports, Inc. (NYSE:DVD) was in 4 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 6. There were 3 hedge funds in our database with DVD holdings at the end of December. Our calculations also showed that DVD isn’t among the 30 most popular stocks among hedge funds (click for Q1 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 115 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.

Wil Harkey of Nantahala Capital Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $29 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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 check out the latest hedge fund action surrounding Dover Motorsports, Inc. (NYSE:DVD).

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

Heading into the second quarter of 2021, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from the fourth quarter of 2020. By comparison, 5 hedge funds held shares or bullish call options in DVD a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management has the largest position in Dover Motorsports, Inc. (NYSE:DVD), worth close to $5.4 million, accounting for 0.2% of its total 13F portfolio. The second most bullish fund manager is Mario Gabelli of GAMCO Investors, with a $1.9 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining peers that are bullish include Renaissance Technologies, Israel Englander’s Millennium Management and . In terms of the portfolio weights assigned to each position Nantahala Capital Management allocated the biggest weight to Dover Motorsports, Inc. (NYSE:DVD), around 0.16% of its 13F portfolio. GAMCO Investors is also relatively very bullish on the stock, earmarking 0.02 percent of its 13F equity portfolio to DVD.

As aggregate interest increased, specific money managers were leading the bulls’ herd. Millennium Management, managed by Israel Englander, initiated the biggest position in Dover Motorsports, Inc. (NYSE:DVD). Millennium Management had $0 million invested in the company at the end of the quarter.

Let’s also examine hedge fund activity in other stocks similar to Dover Motorsports, Inc. (NYSE:DVD). We will take a look at Network-1 Technologies Inc (NYSE:NTIP), TOP Ships Inc. (NASDAQ:TOPS), Timber Pharmaceuticals, Inc. (NYSE:TMBR), Huadi International Group Co., Ltd. (NASDAQ:HUDI), India Globalization Capital Inc. (NYSE:IGC), Brickell Biotech, Inc. (NASDAQ:BBI), and Four Seasons Education (Cayman) Inc. (NYSE:FEDU). This group of stocks’ market caps are closest to DVD’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 1.7 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $9 million in DVD’s case. Network-1 Technologies Inc (NYSE:NTIP) is the most popular stock in this table. On the other hand TOP Ships Inc. (NASDAQ:TOPS) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Dover Motorsports, Inc. (NYSE:DVD) is more popular among hedge funds. Our overall hedge fund sentiment score for DVD is 76. 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. 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 returned 17.2% in 2021 through June 11th but still managed to beat the market by 3.3 percentage points. Hedge funds were also right about betting on DVD as the stock returned 11.8% since the end of March (through 6/11) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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