Do Hedge Funds Love Dollar Tree, Inc. (DLTR)?

It was not entirely clear whether the recent broader market sell-off made U.S. equity valuations undervalued, but it definitely made them more attractive. It is worth mentioning that Russell 2000 ETF (IWM) underperformed the broad-market S&P 500 ETF by more than 14 percentage points during the period of June 25, 2015 through October 30, 2015. This clearly points to the fact that most investors, including hedge fund firms and institutional investors, heavily cut their exposure to high-potential (but seemingly riskier) small-cap stocks during the bloody third quarter. So let’s take a glance at the smart money sentiment towards Dollar Tree, Inc. (NASDAQ:DLTR) and see how it was affected.

Dollar Tree, Inc. (NASDAQ:DLTR) investors should pay attention to an increase in hedge fund sentiment in recent months. DLTR was in 59 hedge funds’ portfolios at the end of the fourth quarter of 2015. There were 52 hedge funds in our database with DLTR positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as T. Rowe Price Group, Inc. (NASDAQ:TROW), Interactive Brokers Group, Inc. (NASDAQ:IBKR), and Hartford Financial Services Group Inc (NYSE:HIG) to gather more data points.

In the eyes of most stock holders, hedge funds are perceived as underperforming, old financial vehicles of yesteryear. While there are greater than 8000 funds with their doors open at present, Our researchers look at the leaders of this club, around 800 funds. Most estimates calculate that this group of people manage the lion’s share of the hedge fund industry’s total capital, and by following their best picks, Insider Monkey has spotted numerous investment strategies that have historically surpassed Mr. Market. Insider Monkey’s small-cap hedge fund strategy outstripped the S&P 500 index by 12 percentage points a year for a decade in their back tests.