Insider Monkey has processed numerous 13F filings of hedge funds and famous investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds and investors’ positions as of the end of the third quarter. You can find write-ups about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves and analyze what the smart money thinks of Deluxe Corporation (NYSE:DLX) based on that data.
Is Deluxe Corporation (NYSE:DLX) a good investment right now? Money managers are taking an optimistic view. The number of long hedge fund bets advanced by 1 in recent months. Our calculations also showed that dlx isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Let’s review the new hedge fund action surrounding Deluxe Corporation (NYSE:DLX).
How have hedgies been trading Deluxe Corporation (NYSE:DLX)?
At Q3’s end, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 5% from the second quarter of 2018. By comparison, 16 hedge funds held shares or bullish call options in DLX heading into this year. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
Among these funds, AQR Capital Management held the most valuable stake in Deluxe Corporation (NYSE:DLX), which was worth $35 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $21 million worth of shares. Moreover, GLG Partners, Gotham Asset Management, and Renaissance Technologies were also bullish on Deluxe Corporation (NYSE:DLX), allocating a large percentage of their portfolios to this stock.
As one would reasonably expect, key money managers have been driving this bullishness. Renaissance Technologies, managed by Jim Simons, created the most outsized position in Deluxe Corporation (NYSE:DLX). Renaissance Technologies had $6.7 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also initiated a $2.7 million position during the quarter. The following funds were also among the new DLX investors: Ken Griffin’s Citadel Investment Group, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Deluxe Corporation (NYSE:DLX) but similarly valued. These stocks are Industrias Bachoco, S.A.B. de C.V. (NYSE:IBA), Rogers Corporation (NYSE:ROG), Dana Incorporated (NYSE:DAN), and Liberty Expedia Holdings, Inc. (NASDAQ:LEXEA). All of these stocks’ market caps resemble DLX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IBA | 3 | 46788 | 0 |
| ROG | 7 | 52427 | -7 |
| DAN | 28 | 468309 | 5 |
| LEXEA | 24 | 324656 | 8 |
| Average | 15.5 | 223045 | 1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.5 hedge funds with bullish positions and the average amount invested in these stocks was $223 million. That figure was $110 million in DLX’s case. Dana Incorporated (NYSE:DAN) is the most popular stock in this table. On the other hand Industrias Bachoco, S.A.B. de C.V. (NYSE:IBA) is the least popular one with only 3 bullish hedge fund positions. Deluxe Corporation (NYSE:DLX) 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 DAN might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
