Is Delek US Holdings, Inc. (NYSE:DK) a buy here? Money managers are taking an optimistic view. The number of long hedge fund bets increased by 7 in recent months.
According to most shareholders, hedge funds are seen as slow, outdated financial tools of the past. While there are over 8000 funds trading at present, we at Insider Monkey choose to focus on the crème de la crème of this group, about 450 funds. It is estimated that this group oversees most of the smart money’s total capital, and by monitoring their top picks, we have brought to light a number of investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually 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 23.3 percentage points in 8 months (check out a sample of our picks).
Equally as important, bullish insider trading activity is another way to break down the marketplace. Just as you’d expect, there are a number of motivations for an upper level exec to downsize shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the valuable potential of this method if “monkeys” understand where to look (learn more here).
Now, let’s take a look at the key action encompassing Delek US Holdings, Inc. (NYSE:DK).
What does the smart money think about Delek US Holdings, Inc. (NYSE:DK)?
At Q1’s end, a total of 25 of the hedge funds we track were long in this stock, a change of 39% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were boosting their stakes significantly.
Of the funds we track, Jim Simons’s Renaissance Technologies had the most valuable position in Delek US Holdings, Inc. (NYSE:DK), worth close to $82.7 million, comprising 0.2% of its total 13F portfolio. The second largest stake is held by Robert Pitts of Steadfast Capital Management, with a $37.8 million position; the fund has 1% of its 13F portfolio invested in the stock. Other peers that are bullish include Israel Englander’s Millennium Management, Andreas Halvorsen’s Viking Global and D. E. Shaw’s D E Shaw.
With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Viking Global, managed by Andreas Halvorsen, initiated the biggest position in Delek US Holdings, Inc. (NYSE:DK). Viking Global had 22.3 million invested in the company at the end of the quarter. Tom Sandell’s Sandell Asset Management also made a $15.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Louis Bacon’s Moore Global Investments, Sean Cullinan’s Point State Capital, and Jeffrey Vinik’s Vinik Asset Management.
How have insiders been trading Delek US Holdings, Inc. (NYSE:DK)?
Insider buying is most useful when the company in focus has experienced transactions within the past six months. Over the last 180-day time period, Delek US Holdings, Inc. (NYSE:DK) has experienced zero unique insiders buying, and 6 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Delek US Holdings, Inc. (NYSE:DK). These stocks are Western Refining, Inc. (NYSE:WNR), BP Prudhoe Bay Royalty Trust (NYSE:BPT), World Fuel Services Corporation (NYSE:INT), Northern Tier Energy LP (NYSE:NTI), and Calumet Specialty Products Partners, L.P (NASDAQ:CLMT). All of these stocks are in the oil & gas refining & marketing industry and their market caps match DK’s market cap.