The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards DuPont de Nemours Inc (NYSE:DD).
DuPont de Nemours Inc (NYSE:DD) was in 57 hedge funds’ portfolios at the end of June. The all time high for this statistic is 82. DD investors should pay attention to an increase in hedge fund interest recently. There were 49 hedge funds in our database with DD positions at the end of the first quarter. Our calculations also showed that DD isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Larry Robbins of Glenview Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, the demand for helium is soaring and there is a helium supply shortage, so we are checking out stock pitches like this emerging helium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now let’s view the latest hedge fund action surrounding DuPont de Nemours Inc (NYSE:DD).
Do Hedge Funds Think DD Is A Good Stock To Buy Now?
At Q2’s end, a total of 57 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 16% from the previous quarter. The graph below displays the number of hedge funds with bullish position in DD over the last 24 quarters. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
More specifically, 40 North Management was the largest shareholder of DuPont de Nemours Inc (NYSE:DD), with a stake worth $447 million reported as of the end of June. Trailing 40 North Management was Third Point, which amassed a stake valued at $230.3 million. Arrowstreet Capital, D E Shaw, and Glenview Capital 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 SAYA Management allocated the biggest weight to DuPont de Nemours Inc (NYSE:DD), around 10.61% of its 13F portfolio. 40 North Management is also relatively very bullish on the stock, designating 10.35 percent of its 13F equity portfolio to DD.
As industrywide interest jumped, key hedge funds have been driving this bullishness. TwinBeech Capital, managed by Jinghua Yan, assembled the biggest position in DuPont de Nemours Inc (NYSE:DD). TwinBeech Capital had $8.1 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $7.4 million position during the quarter. The following funds were also among the new DD investors: Michael Gelband’s ExodusPoint Capital, Paul Tudor Jones’s Tudor Investment Corp, and Zilvinas Mecelis’s Covalis Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as DuPont de Nemours Inc (NYSE:DD) but similarly valued. These stocks are Electronic Arts Inc. (NASDAQ:EA), American International Group Inc (NYSE:AIG), Barclays PLC (NYSE:BCS), Microchip Technology Incorporated (NASDAQ:MCHP), Amphenol Corporation (NYSE:APH), Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN), and Baxter International Inc. (NYSE:BAX). This group of stocks’ market valuations resemble DD’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EA | 56 | 2022602 | 12 |
| AIG | 39 | 2744991 | 6 |
| BCS | 11 | 119955 | 1 |
| MCHP | 50 | 1121112 | 8 |
| APH | 39 | 1203614 | -3 |
| ALXN | 69 | 10090913 | -8 |
| BAX | 46 | 2911204 | 6 |
| Average | 44.3 | 2887770 | 3.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 44.3 hedge funds with bullish positions and the average amount invested in these stocks was $2888 million. That figure was $1653 million in DD’s case. Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) is the most popular stock in this table. On the other hand Barclays PLC (NYSE:BCS) is the least popular one with only 11 bullish hedge fund positions. DuPont de Nemours Inc (NYSE:DD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for DD is 70.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 26.3% in 2021 through October 29th and beat the market again by 2.3 percentage points. Unfortunately DD wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on DD were disappointed as the stock returned -9.7% since the end of June (through 10/29) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Dupont (Old Filings) (NYSE:DD)
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Disclosure: None. This article was originally published at Insider Monkey.
