Is D.R. Horton, Inc. (NYSE:DHI) a buy?
If you were to ask many of your peers, hedge funds are viewed as useless, outdated financial vehicles of a period lost to current times. Although there are over 8,000 hedge funds with their doors open in present day, this site aim at the masters of this club, close to 525 funds. It is widely held that this group has its hands on most of the hedge fund industry's total assets, and by keeping an eye on their highest quality picks, we've unsheathed a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum 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 beaten the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).
Equally as key, bullish insider trading activity is a second way to analyze the stock market universe. Obviously, there are plenty of incentives for an upper level exec to downsize shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the useful potential of this method if shareholders understand where to look (learn more here).
What's more, it's important to study the recent info for D.R. Horton, Inc. (NYSE:DHI).
At the end of the second quarter, a total of 38 of the hedge funds we track were bullish in this stock, a change of 31% from one quarter earlier. With the smart money's sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their holdings considerably.
According to our 13F database, Capital Growth Management, managed by Ken Heebner, holds the most valuable position in D.R. Horton, Inc. (NYSE:DHI). Capital Growth Management has a $184.3 million position in the stock, comprising 4.9% of its 13F portfolio. The second largest stake is held by Odey Asset Management Group, managed by Crispin Odey, which held a $64.3 million position; the fund has 2.5% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include Ken Griffin's Citadel Investment Group, John Brennan's Sirios Capital Management and Israel Englander's Millennium Management.
As aggregate interest spiked, specific money managers have jumped into D.R. Horton, Inc. (NYSE:DHI) headfirst. Capital Growth Management, managed by Ken Heebner, initiated the most outsized position in D.R. Horton, Inc. (NYSE:DHI). Capital Growth Management had 184.3 million invested in the company at the end of the quarter. Daniel S. Och's OZ Management also made a $137.8 million investment in the stock during the quarter. The following funds were also among the new DHI investors: Crispin Odey's Odey Asset Management Group, Ken Griffin's Citadel Investment Group, and Glenn Russell Dubin's Highbridge Capital Management.
Insider buying made by high-level executives is most useful when the company in question has seen transactions within the past half-year. Over the latest 180-day time frame, D.R. Horton, Inc. (NYSE:DHI) has seen zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).
We'll also review the relationship between both of these indicators in other stocks similar to D.R. Horton, Inc. (NYSE:DHI). These stocks are The Ryland Group, Inc. (NYSE:RYL), NVR, Inc. (NYSE:NVR), Toll Brothers Inc (NYSE:TOL), Lennar Corporation (NYSE:LEN), and PulteGroup, Inc. (NYSE:PHM). This group of stocks belong to the residential construction industry and their market caps resemble DHI's market cap.