Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Dorman Products Inc. (NASDAQ:DORM).
Dorman Products Inc. (NASDAQ:DORM) shares haven’t seen a lot of action during the fourth quarter. Overall, hedge fund sentiment was unchanged and nine funds from our database held shares of the company at the end of the third quarter of 2016. 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 The Corporate Executive Board Company (NYSE:CEB), NorthStar Asset Management Group Inc (NYSE:NSAM), and Synaptics, Incorporated (NASDAQ:SYNA) to gather more data points.
In the 21st century investor’s toolkit there are a lot of signals investors employ to value their holdings. A duo of the less known signals are hedge fund and insider trading indicators. We have shown that, historically, those who follow the best picks of the best money managers can beat the market by a superb margin (see the details here).
Now, we’re going to take a look at the latest action surrounding Dorman Products Inc. (NASDAQ:DORM).
How are hedge funds trading Dorman Products Inc. (NASDAQ:DORM)?
As stated earlier, At the end of the third quarter, nine funds tracked by Insider Monkey held long positions in this stock, unchanged over the quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Royce & Associates, managed by Chuck Royce, holds the largest position in Dorman Products Inc. (NASDAQ:DORM). Royce & Associates has a $76.1 million position in the stock, comprising 0.5% of its 13F portfolio. Coming in second is Third Avenue Management, managed by Martin Whitman, which holds a $6.4 million position; 0.3% of its 13F portfolio is allocated to the stock. Other professional money managers that are bullish comprise Matthew A. Weatherbie’s Weatherbie Capital, Murray Stahl’s Horizon Asset Management and Cliff Asness’s AQR Capital Management.