Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips on the charts, usually don’t make them change their opinion towards a company. This time it may be different. During the third quarter we observed increased volatility and small-cap stocks underperformed the market. Hedge fund investor letters indicated that they are cutting their overall exposure, closing out some position and doubling down on others. Let’s take a look at the hedge fund sentiment towards DuPont Fabros Technology, Inc. (NYSE:DFT) to find out whether it was one of their high conviction long-term ideas.
DuPont Fabros Technology, Inc. (NYSE:DFT) has experienced an increase in hedge fund sentiment of late. At the end of this article we will also compare DFT to other stocks including Planet Fitness Inc (NYSE:PLNT), Healthequity Inc (NASDAQ:HQY), and Mack Cali Realty Corp (NYSE:CLI) to get a better sense of its popularity.
Follow Dupont Fabros Technology Inc. (NYSE:DFT)
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To most traders, hedge funds are seen as slow, outdated investment tools of yesteryear. While there are more than 8000 funds trading at the moment, Our experts look at the upper echelon of this club, around 700 funds. These money managers handle bulk of the hedge fund industry’s total asset base, and by watching their first-class picks, Insider Monkey has discovered a number of investment strategies that have historically outperformed the broader indices. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points a year for a decade in their back tests.
With all of this in mind, we’re going to take a look at the key action regarding DuPont Fabros Technology, Inc. (NYSE:DFT).
How have hedgies been trading DuPont Fabros Technology, Inc. (NYSE:DFT)?
Heading into Q4, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 14% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, AEW Capital Management, managed by Jeffrey Furber, holds the number one position in DuPont Fabros Technology, Inc. (NYSE:DFT). AEW Capital Management has a $58.1 million position in the stock, comprising 1.4% of its 13F portfolio. Sitting at the No. 2 spot is Fisher Asset Management, managed by Ken Fisher, which holds a $34.3 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors that are bullish comprise Jim Simons’ Renaissance Technologies, Israel Englander’s Millennium Management and Dmitry Balyasny’s Balyasny Asset Management.
As one would reasonably expect, specific money managers were breaking ground themselves. Alyeska Investment Group, managed by Anand Parekh, established the most outsized position in DuPont Fabros Technology, Inc. (NYSE:DFT). Alyeska Investment Group had $7.4 million invested in the company at the end of the quarter. Thomas Bailard’s Bailard Inc also made a $0.7 million investment in the stock during the quarter. The other funds with new positions in the stock are George Hall’s Clinton Group, Jacob Gottlieb’s Visium Asset Management, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s now take a look at hedge fund activity in other stocks similar to DuPont Fabros Technology, Inc. (NYSE:DFT). We will take a look at Planet Fitness Inc (NYSE:PLNT), Healthequity Inc (NASDAQ:HQY), Mack Cali Realty Corp (NYSE:CLI), and Matson Inc (NYSE:MATX). This group of stocks’ market caps match DFT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PLNT | 14 | 62285 | 14 |
| HQY | 13 | 84565 | 1 |
| CLI | 21 | 123021 | 0 |
| MATX | 16 | 46522 | -1 |
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 $79 million, compared to $173 million in DFT’s case. Mack Cali Realty Corp (NYSE:CLI) is the most popular stock in this table. On the other hand Healthequity Inc (NASDAQ:HQY) is the least popular one with only 13 bullish hedge fund positions. DuPont Fabros Technology, Inc. (NYSE:DFT) 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 CLI might be a better candidate to consider a long position.
