The Dolan Company (NYSE:DM) has experienced an increase in support from the world’s most elite money managers of late.
If you’d ask most traders, hedge funds are perceived as worthless, old financial vehicles of the past. While there are greater than 8000 funds with their doors open at the moment, we at Insider Monkey look at the aristocrats of this group, close to 450 funds. It is estimated that this group has its hands on the lion’s share of the hedge fund industry’s total asset base, and by watching their highest performing equity investments, we have come up with a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).
Just as beneficial, positive insider trading sentiment is another way to parse down the world of equities. There are a number of stimuli for an upper level exec to sell shares of his or her company, but just one, very simple reason why they would buy. Several academic studies have demonstrated the useful potential of this tactic if you understand where to look (learn more here).
With these “truths” under our belt, we’re going to take a glance at the latest action surrounding The Dolan Company (NYSE:DM).
How have hedgies been trading The Dolan Company (NYSE:DM)?
At year’s end, a total of 10 of the hedge funds we track were long in this stock, a change of 67% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes significantly.
According to our comprehensive database, Amy Minella’s Cardinal Capital had the biggest position in The Dolan Company (NYSE:DM), worth close to $5.9 million, accounting for 0.4% of its total 13F portfolio. The second largest stake is held by Wilmot B. Harkey and Daniel Mack of Nantahala Capital Management, with a $4.9 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Remaining peers that are bullish include Brian Bares’s Bares Capital Management, Jacob Doft’s Highline Capital Management and Ken Griffin’s Citadel Investment Group.
As aggregate interest increased, specific money managers have jumped into The Dolan Company (NYSE:DM) headfirst. Nantahala Capital Management, managed by Wilmot B. Harkey and Daniel Mack, initiated the biggest position in The Dolan Company (NYSE:DM). Nantahala Capital Management had 4.9 million invested in the company at the end of the quarter. Charles Davidson’s Wexford Capital also made a $0.2 million investment in the stock during the quarter. The other funds with brand new DM positions are Jim Simons’s Renaissance Technologies and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners.
What do corporate executives and insiders think about The Dolan Company (NYSE:DM)?
Insider purchases made by high-level executives is particularly usable when the primary stock in question has seen transactions within the past 180 days. Over the last half-year time period, The Dolan Company (NYSE:DM) has seen 7 unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to The Dolan Company (NYSE:DM). These stocks are Reed Elsevier NV (ADR) (NYSE:ENL), Meredith Corporation (NYSE:MDP), and Martha Stewart Living Omnimedia, Inc. (NYSE:MSO). All of these stocks are in the publishing – periodicals industry and their market caps resemble DM’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Reed Elsevier NV (ADR) (NYSE:ENL) | 1 | 0 | 0 |
| Meredith Corporation (NYSE:MDP) | 11 | 0 | 4 |
| Martha Stewart Living Omnimedia, Inc. (NYSE:MSO) | 9 | 0 | 0 |
With the results exhibited by the aforementioned strategies, everyday investors must always watch hedge fund and insider trading sentiment, and The Dolan Company (NYSE:DM) applies perfectly to this mantra.
