Hedge funds don’t get the respect they used to get. Nowadays investors prefer passive funds over actively managed funds. One thing they don’t realize is that 100% of the passive funds didn’t see the coronavirus recession coming, but a lot of hedge funds did. Even we published an article near the end of February and predicted a US recession. Think about all the losses you could have avoided if you sold your shares in February and bought them back at the end of March. In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. Keeping this in mind, let’s take a look at whether DHT Holdings Inc (NYSE:DHT) is a good investment right now.
DHT Holdings Inc (NYSE:DHT) investors should be aware of an increase in hedge fund interest of late. Our calculations also showed that DHT isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
In the eyes of most shareholders, hedge funds are seen as underperforming, outdated investment tools of yesteryear. While there are over 8000 funds with their doors open today, Our researchers look at the crème de la crème of this group, about 850 funds. These investment experts oversee the majority of the hedge fund industry’s total capital, and by following their best stock picks, Insider Monkey has formulated a number of investment strategies that have historically defeated the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 35.3% since February 2017 (through March 3rd) even though the market was up more than 35% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Daniel Gold of QVT Financial
We leave no stone unturned when looking for the next great investment idea. For example, this investor can predict short term winners following earnings announcements with 77% accuracy, so we check out his stock picks. A former hedge fund manager is pitching the “next Amazon” in this video; again we are listening. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s take a peek at the fresh hedge fund action regarding DHT Holdings Inc (NYSE:DHT).
How have hedgies been trading DHT Holdings Inc (NYSE:DHT)?
At the end of the fourth quarter, a total of 34 of the hedge funds tracked by Insider Monkey were long this stock, a change of 42% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards DHT over the last 18 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in DHT Holdings Inc (NYSE:DHT), which was worth $80.1 million at the end of the third quarter. On the second spot was Hosking Partners which amassed $25.4 million worth of shares. Millennium Management, Arrowstreet Capital, and Lansdowne Partners were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Firefly Value Partners allocated the biggest weight to DHT Holdings Inc (NYSE:DHT), around 1.54% of its 13F portfolio. Pinz Capital is also relatively very bullish on the stock, earmarking 1.32 percent of its 13F equity portfolio to DHT.
As one would reasonably expect, key hedge funds were breaking ground themselves. QVT Financial, managed by Daniel Gold, assembled the most valuable position in DHT Holdings Inc (NYSE:DHT). QVT Financial had $3.6 million invested in the company at the end of the quarter. Matthew L Pinz’s Pinz Capital also made a $3.6 million investment in the stock during the quarter. The following funds were also among the new DHT investors: Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital, Till Bechtolsheimer’s Arosa Capital Management, and Benjamin A. Smith’s Laurion Capital Management.
Let’s now review hedge fund activity in other stocks similar to DHT Holdings Inc (NYSE:DHT). We will take a look at Materion Corp (NYSE:MTRN), OFG Bancorp (NYSE:OFG), Brookfield Property REIT Inc. (NASDAQ:BPR), and Radware Ltd. (NASDAQ:RDWR). This group of stocks’ market caps match DHT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MTRN | 18 | 108787 | -1 |
| OFG | 11 | 52391 | -4 |
| BPR | 13 | 54781 | -2 |
| RDWR | 13 | 322527 | -3 |
| Average | 13.75 | 134622 | -2.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $135 million. That figure was $260 million in DHT’s case. Materion Corp (NYSE:MTRN) is the most popular stock in this table. On the other hand OFG Bancorp (NYSE:OFG) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks DHT Holdings Inc (NYSE:DHT) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 1.3% in 2020 through May 1st but still managed to beat the market by 12.9 percentage points. Hedge funds were also right about betting on DHT, though not to the same extent, as the stock returned -9.3% in 2020 (through May 1st) and outperformed the market as well.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
