Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: DHT Holdings Inc (NYSE:DHT) .
Is DHT Holdings Inc (NYSE:DHT) the right investment to pursue these days? The best stock pickers are actually turning less bullish. The number of long hedge fund investments retreated by 3 recently. DHT was in 15 hedge funds’ portfolios at the end of September. There were 18 hedge funds in our database with DHT positions at the end of the previous quarter. At the end of this article we will also compare DHT to other stocks including Lakeland Bancorp, Inc. (NASDAQ:LBAI), Kforce Inc. (NASDAQ:KFRC), and Aerie Pharmaceuticals Inc (NASDAQ:AERI) to get a better sense of its popularity.
Follow D H T Holdings Inc (NYSE:DHT)
Follow D H T Holdings Inc (NYSE:DHT)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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What have hedge funds been doing with DHT Holdings Inc (NYSE:DHT)?
Heading into the fourth quarter of 2016, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 17% slide from one quarter earlier. There were a total of 31 hedge funds with a bullish position in DHT at the beginning of this year, which has since fallen by over 50% in just three quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Kevin Michael Ulrich and Anthony Davis’ Anchorage Advisors has the most valuable position in DHT Holdings Inc (NYSE:DHT), worth close to $11 million, amounting to 1.1% of its total 13F portfolio. On Anchorage Advisors’ heels is AQR Capital Management, led by Cliff Asness, holding a $3.6 million position. Other members of the smart money with similar optimism include Glenn Russell Dubin’s Highbridge Capital Management, Neil Chriss’ Hutchin Hill Capital, and Jim Simons’ Renaissance Technologies. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Due to the fact that DHT Holdings Inc (NYSE:DHT) has gone through declining sentiment from the smart money, it’s easy to see that there were a few hedgies who were dropping their positions entirely heading into Q4. It’s worth mentioning that Simon Sadler’s Segantii Capital said goodbye to the biggest investment of the 700 funds tracked by Insider Monkey, worth close to $3.9 million in stock, and Israel Englander’s Millennium Management was right behind this move, as the fund dropped about $3.8 million worth of shares.
Let’s also examine hedge fund activity in other stocks similar to DHT Holdings Inc (NYSE:DHT). These stocks are Lakeland Bancorp, Inc. (NASDAQ:LBAI), Kforce Inc. (NASDAQ:KFRC), Aerie Pharmaceuticals Inc (NASDAQ:AERI), and AtriCure Inc. (NASDAQ:ATRC). This group of stocks’ market valuations are closest to DHT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LBAI | 8 | 17028 | 1 |
| KFRC | 8 | 21991 | -6 |
| AERI | 31 | 395104 | 14 |
| ATRC | 17 | 43840 | 2 |
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $119 million. That figure was $24 million in DHT’s case. Aerie Pharmaceuticals Inc (NASDAQ:AERI) is the most popular stock in this table. On the other hand Lakeland Bancorp, Inc. (NASDAQ:LBAI) is the least popular one with only 8 bullish hedge fund positions. DHT Holdings Inc (NYSE:DHT) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard AERI might be a better candidate to consider taking a long position in.
Disclosure: None
