The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the fourth quarter, which unveil their equity positions as of December 31. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards DXC Technology Company (NYSE:DXC).
Is DXC Technology Company (NYSE:DXC) a safe investment right now? Hedge funds are selling. The number of bullish hedge fund bets decreased by 7 lately. Our calculations also showed that DXC isn’t among the 30 most popular stocks among hedge funds.
If you’d ask most market participants, hedge funds are seen as unimportant, old investment vehicles of years past. While there are over 8000 funds trading at present, Our experts hone in on the leaders of this club, about 750 funds. It is estimated that this group of investors orchestrate the lion’s share of all hedge funds’ total capital, and by shadowing their unrivaled picks, Insider Monkey has deciphered many investment strategies that have historically outpaced the broader indices. Insider Monkey’s flagship hedge fund strategy outrun the S&P 500 index by nearly 5 percentage points a year since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 27.5% since February 2017 (through March 12th) even though the market was up nearly 25% during the same period. We just shared a list of 6 short targets in our latest quarterly update and they are already down an average of 6% in less than a month.
Let’s check out the latest hedge fund action encompassing DXC Technology Company (NYSE:DXC).
How have hedgies been trading DXC Technology Company (NYSE:DXC)?
At Q4’s end, a total of 43 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from the second quarter of 2018. By comparison, 58 hedge funds held shares or bullish call options in DXC a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Glenview Capital held the most valuable stake in DXC Technology Company (NYSE:DXC), which was worth $489.9 million at the end of the third quarter. On the second spot was Maverick Capital which amassed $299.8 million worth of shares. Moreover, AQR Capital Management, D E Shaw, and Dorsal Capital Management were also bullish on DXC Technology Company (NYSE:DXC), allocating a large percentage of their portfolios to this stock.
Since DXC Technology Company (NYSE:DXC) has faced falling interest from the smart money, it’s safe to say that there were a few funds who sold off their full holdings by the end of the third quarter. Interestingly, Jim Simons’s Renaissance Technologies dropped the largest stake of the “upper crust” of funds followed by Insider Monkey, comprising an estimated $75.6 million in stock. Robert Pohly’s fund, Samlyn Capital, also cut its stock, about $42.1 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 7 funds by the end of the third quarter.
Let’s go over hedge fund activity in other stocks similar to DXC Technology Company (NYSE:DXC). These stocks are Total System Services, Inc. (NYSE:TSS), American Airlines Group Inc (NASDAQ:AAL), Ctrip.com International, Ltd. (NASDAQ:CTRP), and ABIOMED, Inc. (NASDAQ:ABMD). This group of stocks’ market valuations are similar to DXC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TSS | 35 | 1108431 | 0 |
| AAL | 45 | 2296666 | 6 |
| CTRP | 21 | 771724 | 2 |
| ABMD | 31 | 1301183 | 9 |
| Average | 33 | 1369501 | 4.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 33 hedge funds with bullish positions and the average amount invested in these stocks was $1370 million. That figure was $1705 million in DXC’s case. American Airlines Group Inc (NASDAQ:AAL) is the most popular stock in this table. On the other hand Ctrip.com International, Ltd. (NASDAQ:CTRP) is the least popular one with only 21 bullish hedge fund positions. DXC Technology Company (NYSE:DXC) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 15 most popular stocks among hedge funds returned 19.7% through March 15th and outperformed the S&P 500 ETF (SPY) by 6.6 percentage points. Hedge funds were also right about betting on DXC as the stock returned 23.7% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
