At Insider Monkey, we pore over the filings of nearly 887 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of December 31st. In this article, we will use that wealth of knowledge to determine whether or not Dana Incorporated (NYSE:DAN) makes for a good investment right now.
Is DAN stock a buy? Money managers were becoming more confident. The number of long hedge fund bets moved up by 6 recently. Dana Incorporated (NYSE:DAN) was in 28 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 28. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that DAN isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now to identify the next stock with 10x upside potential. 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 website. Now let’s take a look at the latest hedge fund action encompassing Dana Incorporated (NYSE:DAN).
Do Hedge Funds Think DAN Is A Good Stock To Buy Now?
At the end of the fourth quarter, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 27% from the previous quarter. The graph below displays the number of hedge funds with bullish position in DAN over the last 22 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Icahn Capital LP was the largest shareholder of Dana Incorporated (NYSE:DAN), with a stake worth $77.8 million reported as of the end of December. Trailing Icahn Capital LP was Pzena Investment Management, which amassed a stake valued at $65.6 million. GAMCO Investors, Balyasny Asset Management, and AQR Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Brightline Capital allocated the biggest weight to Dana Incorporated (NYSE:DAN), around 7.74% of its 13F portfolio. Elm Ridge Capital is also relatively very bullish on the stock, earmarking 4.02 percent of its 13F equity portfolio to DAN.
As aggregate interest increased, specific money managers were leading the bulls’ herd. Icahn Capital LP, managed by Carl Icahn, initiated the most valuable position in Dana Incorporated (NYSE:DAN). Icahn Capital LP had $77.8 million invested in the company at the end of the quarter. Gregg Moskowitz’s Interval Partners also initiated a $19.9 million position during the quarter. The other funds with brand new DAN positions are Naval Khera’s Brightline Capital, Chuck Royce’s Royce & Associates, and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors.
Let’s go over hedge fund activity in other stocks similar to Dana Incorporated (NYSE:DAN). These stocks are Mr. Cooper Group Inc. (NASDAQ:COOP), IGM Biosciences, Inc. (NASDAQ:IGMS), BancorpSouth Bank (NYSE:BXS), Asbury Automotive Group, Inc. (NYSE:ABG), Taro Pharmaceutical Industries Ltd. (NYSE:TARO), Dorman Products Inc. (NASDAQ:DORM), and JinkoSolar Holding Co., Ltd. (NYSE:JKS). This group of stocks’ market values match DAN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| COOP | 22 | 521071 | -1 |
| IGMS | 18 | 898337 | 2 |
| BXS | 15 | 51196 | -4 |
| ABG | 23 | 686346 | -5 |
| TARO | 6 | 81304 | -3 |
| DORM | 21 | 70653 | 2 |
| JKS | 18 | 212687 | 8 |
| Average | 17.6 | 360228 | -0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.6 hedge funds with bullish positions and the average amount invested in these stocks was $360 million. That figure was $322 million in DAN’s case. Asbury Automotive Group, Inc. (NYSE:ABG) is the most popular stock in this table. On the other hand Taro Pharmaceutical Industries Ltd. (NYSE:TARO) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Dana Incorporated (NYSE:DAN) is more popular among hedge funds. Our overall hedge fund sentiment score for DAN is 90. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks returned 12.3% in 2021 through April 19th but still managed to beat the market by 0.9 percentage points. Hedge funds were also right about betting on DAN as the stock returned 36% since the end of December (through 4/19) 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.
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Disclosure: None. This article was originally published at Insider Monkey.
