Are hedgies right about Dana Holding Corporation (NYSE:DAN)?
To many investors, hedge funds are viewed as useless, outdated financial tools of a period lost to current times. Although there are more than 8,000 hedge funds trading today, Insider Monkey looks at the moguls of this group, close to 525 funds. It is widely held that this group has its hands on the lion's share of the hedge fund industry's total capital, and by monitoring their highest quality stock picks, we've spotted a number of investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we've began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 33 percentage points in 11 months (find the details here).
Just as key, positive insider trading sentiment is a second way to analyze the financial markets. Obviously, there are lots of stimuli for a corporate insider to cut shares of his or her company, but only one, very clear reason why they would behave bullishly. Several academic studies have demonstrated the impressive potential of this method if piggybackers understand what to do (learn more here).
Now that that's out of the way, let's study the newest info for Dana Holding Corporation (NYSE:DAN).
Heading into Q3, a total of 34 of the hedge funds we track were bullish in this stock, a change of -6% from the first quarter. With hedgies' capital changing hands, there exists an "upper tier" of key hedge fund managers who were increasing their holdings substantially.
Out of the hedge funds we follow, GAMCO Investors, managed by Mario Gabelli, holds the most valuable position in Dana Holding Corporation (NYSE:DAN). GAMCO Investors has a $74.6 million position in the stock, comprising 0.5% of its 13F portfolio. Sitting at the No. 2 spot is Crispin Odey of Odey Asset Management Group, with a $50.1 million position; the fund has 2% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include Richard S. Pzena's Pzena Investment Management, Edward A. Mule's Silver Point Capital and Larry Foley and Paul Farrell's Bronson Point Partners.
Since Dana Holding Corporation (NYSE:DAN) has faced bearish sentiment from upper-tier hedge fund managers, it's safe to say that there were a few hedge funds who were dropping their positions entirely in Q1. At the top of the heap, Debra Fine's Fine Capital Partners sold off the largest position of the 450+ funds we monitor, comprising close to $25 million in stock. Phill Gross and Robert Atchinson's fund, Adage Capital Management, also dumped its stock, about $21.7 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 2 funds in Q1.
Insider buying is best served when the company in focus has experienced transactions within the past six months. Over the latest six-month time frame, Dana Holding Corporation (NYSE:DAN) has seen zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).
We'll check out the relationship between both of these indicators in other stocks similar to Dana Holding Corporation (NYSE:DAN). These stocks are WABCO Holdings Inc. (NYSE:WBC), Westport Innovations Inc. (USA) (NASDAQ:WPRT), Visteon Corp (NYSE:VC), Tenneco Inc (NYSE:TEN), and Gentex Corporation (NASDAQ:GNTX). This group of stocks are in the auto parts industry and their market caps match DAN's market cap.