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Dana Holding Corporation (DAN): Hedge Funds Are Bullish and Insiders Are Bearish, What Should You Do?

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Dana Holding Corporation (NYSE:DAN) was in 36 hedge funds’ portfolio at the end of March. DAN has experienced an increase in hedge fund sentiment lately. There were 35 hedge funds in our database with DAN holdings at the end of the previous quarter.

Dana Holding Corporation (NYSE:DAN)

If you’d ask most stock holders, hedge funds are assumed to be unimportant, outdated financial tools of the past. While there are over 8000 funds in operation at the moment, we at Insider Monkey choose to focus on the elite of this group, close to 450 funds. It is widely believed that this group has its hands on the lion’s share of the smart money’s total capital, and by monitoring their top equity investments, we have revealed a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 outperformed the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Just as important, positive insider trading sentiment is another way to parse down the stock market universe. Obviously, there are a number of motivations for a corporate insider to cut shares of his or her company, but just one, very clear reason why they would behave bullishly. Various empirical studies have demonstrated the market-beating potential of this strategy if piggybackers understand what to do (learn more here).

Now, let’s take a look at the key action regarding Dana Holding Corporation (NYSE:DAN).

How are hedge funds trading Dana Holding Corporation (NYSE:DAN)?

In preparation for this quarter, a total of 36 of the hedge funds we track were long in this stock, a change of 3% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their holdings substantially.

When looking at the hedgies we track, GAMCO Investors, managed by Mario Gabelli, holds the biggest position in Dana Holding Corporation (NYSE:DAN). GAMCO Investors has a $68.3 million position in the stock, comprising 0.4% of its 13F portfolio. The second largest stake is held by Edward A. Mule of Silver Point Capital, with a $51.7 million position; the fund has 4.8% of its 13F portfolio invested in the stock. Other hedge funds with similar optimism include Richard S. Pzena’s Pzena Investment Management, Crispin Odey’s Odey Asset Management Group and Anthony Bozza’s Lakewood Capital Management.

Consequently, key money managers were breaking ground themselves. Odey Asset Management Group, managed by Crispin Odey, initiated the most valuable position in Dana Holding Corporation (NYSE:DAN). Odey Asset Management Group had 35.3 million invested in the company at the end of the quarter. Douglas Dillard Jr. and Raj D. Venkatesan’s Standard Pacific Capital also made a $20.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Andrew R. Midler’s Savitr Capital, SAC Subsidiary’s Sigma Capital Management, and Jeffrey Vinik’s Vinik Asset Management.

What have insiders been doing with Dana Holding Corporation (NYSE:DAN)?

Insider trading activity, especially when it’s bullish, is at its handiest when the company in question has seen transactions within the past 180 days. Over the last half-year time period, Dana Holding Corporation (NYSE:DAN) has experienced zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity 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.

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