We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Millennium Management. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically, a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case here because none of the 700+ hedge funds tracked by Insider Monkey identified DVD as a viable investment and initiated a position in the stock.
Let’s now review hedge fund activity in other stocks similar to Dover Motorsports, Inc. (NYSE:DVD). We will take a look at Universal Technical Institute, Inc. (NYSE:UTI), The L.S. Starrett Company (NYSE:SCX), Covisint Corp (NASDAQ:COVS), and The McClatchy Company (NYSE:MNI). All of these stocks’ market caps are similar to Dover Motorsports, Inc. (NYSE:DVD)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UTI | 11 | 21128 | -1 |
| SCX | 4 | 12369 | 0 |
| COVS | 8 | 22344 | -4 |
| MNI | 10 | 9041 | -3 |
As you can see, these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $16 million. That figure was $15 million in Dover Motorsports, Inc. (NYSE:DVD)’s case. Universal Technical Institute, Inc. (NYSE:UTI) is the most popular stock in this table. On the other hand, The L.S. Starrett Company (NYSE:SCX) is the least popular one with only 4 bullish hedge fund positions. Dover Motorsports, Inc. (NYSE:DVD) 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, Universal Technical Institute, Inc. (NYSE:UTI) might be a better candidate to consider a long position.
