Is Denison Mines Corp (USA) (NYSEAMEX:DNN) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before doing days of research on it. Given their 2 and 20 payment structure, hedge funds have more resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Denison Mines Corp (USA) (NYSEAMEX:DNN) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 4 hedge funds’ portfolios at the end of September. 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 Control4 Corp (NASDAQ:CTRL), Mattersight Corporation (NASDAQ:MATR), and Alliance One International, Inc. (NYSE:AOI) to gather more data points.
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To most investors, hedge funds are seen as unimportant, outdated financial tools of yesteryear. While there are over 8000 funds trading at the moment, Our researchers choose to focus on the crème de la crème of this group, around 700 funds. Most estimates calculate that this group of people direct the majority of the smart money’s total capital, and by paying attention to their highest performing stock picks, Insider Monkey has unearthed numerous investment strategies that have historically outperformed the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points per year for a decade in their back tests.
Keeping this in mind, we’re going to go over the fresh action surrounding Denison Mines Corp (USA) (NYSEAMEX:DNN).
What have hedge funds been doing with Denison Mines Corp (USA) (NYSEAMEX:DNN)?
At Q3’s end, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exist a few key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Weiss Asset Management, managed by Andrew Weiss, holds the biggest position in Denison Mines Corp (USA) (NYSEAMEX:DNN). Weiss Asset Management has a $0.7 million position in the stock, comprising 0.5% of its 13F portfolio. Sitting at the No. 2 spot is Eric Sprott of Sprott Asset Management, with a $0.6 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other professional money managers with similar optimism comprise Ken Griffin’s Citadel Investment Group, D. E. Shaw’s D E Shaw and .
Seeing as Denison Mines Corp (USA) (NYSEAMEX:DNN) has faced declining sentiment from hedge fund managers, it’s safe to say that there were a few hedge funds that slashed their full holdings in the third quarter. At the top of the heap, Joel Greenblatt’s Gotham Asset Management dropped the biggest stake of the 700 funds watched by Insider Monkey, valued at close to $0 million in call options., and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund said goodbye to about $0 million worth. These bearish behaviors are intriguing to say the least, 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 Denison Mines Corp (USA) (NYSEAMEX:DNN) but similarly valued. We will take a look at Control4 Corp (NASDAQ:CTRL), Mattersight Corporation (NASDAQ:MATR), Alliance One International, Inc. (NYSE:AOI), and Great Ajax Corp (NYSE:AJX). This group of stocks’ market valuations are closest to DNN’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CTRL | 6 | 24767 | -1 |
| MATR | 5 | 31181 | 1 |
| AOI | 9 | 22084 | -2 |
| AJX | 5 | 23524 | -1 |
As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $25 million. That figure was $1 million in DNN’s case. Alliance One International, Inc. (NYSE:AOI) is the most popular stock in this table. On the other hand, Mattersight Corporation (NASDAQ:MATR) is the least popular one. Compared to these stocks Denison Mines Corp (USA) (NYSEAMEX:DNN), with 4 bullish hedge fund positions is even less popular than MATR. To comprehend why the smart money isn’t behind this stock, further research is needed. This doesn’t necessarily mean that this stock is not a good buying opportunity, but it is possible that investors found it overvalued because they haven’t considered the bullish thesis. In any case, more detailed analysis is advisable.
