Have Hedge Funds Found DSW Inc. (DSW)’s Perfect Re-Entry Point?

As industry-wide interest jumped, specific money managers were breaking ground themselves. Adage Capital Management assembled the largest position in DSW Inc. (NYSE:DSW). Adage Capital Management had $41 million invested in the company at the end of the quarter. Marc Majzner’s Clearline Capital also made a $3.6 million investment in the stock during the quarter. The following funds were also among the new DSW investors: Noam Gottesman’s GLG Partners, Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital, and Jim Simons’ Renaissance Technologies.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as DSW Inc. (NYSE:DSW) but similarly valued. These stocks are Innocoll AG (NASDAQ:INNL), Insulet Corporation (NASDAQ:PODD), Luxoft Holding Inc (NYSE:LXFT), and Cosan Limited (USA) (NYSE:CZZ). This group of stocks’ market caps resemble DSW’s market cap.

As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $154 million. That figure was $235 million in DSW’s case. Cosan Limited (USA) (NYSE:CZZ) is the most popular stock in this table. On the other hand Innocoll AG (NASDAQ:INNL) is the least popular one with only 9 bullish hedge fund positions. DSW Inc. (NYSE:DSW) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal, as we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, both DSW and CZZ might be good candidates to consider taking long positions in.

Disclosure: None