The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought Dell Technologies Inc. (NYSE:DELL) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.
Is Dell Technologies Inc. (NYSE:DELL) a buy here? Investors who are in the know were in a bearish mood. The number of bullish hedge fund bets went down by 2 lately. Dell Technologies Inc. (NYSE:DELL) was in 60 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 86. Our calculations also showed that DELL isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 62 hedge funds in our database with DELL holdings at the end of June.
Dan Loeb of Third Point
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Keeping this in mind we’re going to review the new hedge fund action encompassing Dell Technologies Inc. (NYSE:DELL).
Do Hedge Funds Think DELL Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 60 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -3% from the previous quarter. On the other hand, there were a total of 43 hedge funds with a bullish position in DELL a year ago. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Elliott Investment Management, managed by Paul Singer, holds the number one position in Dell Technologies Inc. (NYSE:DELL). Elliott Investment Management has a $2.5836 billion position in the stock, comprising 18.5% of its 13F portfolio. The second most bullish fund manager is Lyrical Asset Management, managed by Andrew Wellington and Jeff Keswin, which holds a $450.1 million position; 5.8% of its 13F portfolio is allocated to the stock. Remaining members of the smart money with similar optimism contain Dan Loeb’s Third Point, Joshua Friedman and Mitchell Julis’s Canyon Capital Advisors and Scott Ferguson’s Sachem Head Capital. In terms of the portfolio weights assigned to each position Engine Capital allocated the biggest weight to Dell Technologies Inc. (NYSE:DELL), around 26.13% of its 13F portfolio. HighVista Strategies is also relatively very bullish on the stock, designating 24.47 percent of its 13F equity portfolio to DELL.
Due to the fact that Dell Technologies Inc. (NYSE:DELL) has witnessed a decline in interest from the entirety of the hedge funds we track, we can see that there were a few fund managers that decided to sell off their positions entirely in the third quarter. Intriguingly, John Overdeck and David Siegel’s Two Sigma Advisors dumped the biggest investment of the “upper crust” of funds tracked by Insider Monkey, comprising an estimated $87.7 million in stock. Himanshu Gulati’s fund, Antara Capital, also dropped its stock, about $32.2 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 2 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Dell Technologies Inc. (NYSE:DELL). These stocks are The TJX Companies, Inc. (NYSE:TJX), Truist Financial Corporation (NYSE:TFC), HCA Healthcare Inc (NYSE:HCA), Zoom Video Communications, Inc. (NASDAQ:ZM), Marsh & McLennan Companies, Inc. (NYSE:MMC), General Motors Company (NYSE:GM), and Fidelity National Information Services Inc. (NYSE:FIS). This group of stocks’ market caps are similar to DELL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TJX | 63 | 2330294 | 7 |
| TFC | 34 | 275906 | -5 |
| HCA | 72 | 3309822 | 12 |
| ZM | 56 | 6003836 | -3 |
| MMC | 42 | 1987176 | 1 |
| GM | 77 | 6416552 | -9 |
| FIS | 69 | 6044245 | -3 |
| Average | 59 | 3766833 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 59 hedge funds with bullish positions and the average amount invested in these stocks was $3767 million. That figure was $6143 million in DELL’s case. General Motors Company (NYSE:GM) is the most popular stock in this table. On the other hand Truist Financial Corporation (NYSE:TFC) is the least popular one with only 34 bullish hedge fund positions. Dell Technologies Inc. (NYSE:DELL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for DELL is 54.2. 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. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on DELL as the stock returned 7.7% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
