It was a rough third quarter for many hedge funds, which were naturally unable to overcome the big dip in the broad market, as the S&P 500 fell by about 7% during the quarter. The Russell 2000, composed of smaller companies, performed even worse, trailing the S&P by about 14 percentage points between June 25 and October 30, as investors fled less-known quantities for safe havens. This was the case with hedge funds, who we heard were pulling money from the market amid the volatility, which included money from small-cap stocks, which they invest in at a higher rate than other investors. This action contributed to the greater decline in these stocks during the tumultuous period. We will study how this market volatility affected their sentiment towards Drew Industries, Inc. (NYSE:DW) during the quarter below.
Drew Industries, Inc. (NYSE:DW) has experienced a decrease in the hedge fund interest of late. 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 Renasant Corp. (NASDAQ:RNST), BlackRock Credit All Inc Trust IV (NYSE:BTZ), and Noah Holdings Limited (ADR) (NYSE:NOAH) to gather more data points.
To most investors, hedge funds are assumed to be worthless, old financial tools of years past. While there are more than an 8000 funds in operation at present, Our researchers choose to focus on the top tier of this club, approximately 700 funds. Most estimates calculate that this group of people orchestrate bulk of the smart money’s total asset base, and by following their top investments, Insider Monkey has figured out several investment strategies that have historically beaten the broader indices. Insider Monkey’s small-cap hedge fund strategy outrun the S&P 500 index by 12 percentage points annually for a decade in their back tests.
Now, we’re going to take a peek at the key action encompassing Drew Industries, Inc. (NYSE:DW).
How have hedgies been trading Drew Industries, Inc. (NYSE:DW)?
Heading into Q4, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 20% from the second quarter. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Royce & Associates, managed by Chuck Royce, holds the biggest position in Drew Industries, Inc. (NYSE:DW). Royce & Associates has a $46.3 million position in the stock, comprising 0.2% of its 13F portfolio. The second most bullish fund manager is Julian Allen of Spitfire Capital, with a $5.9 million position; the fund has 2.5% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish consist of Jim Simons’ Renaissance Technologies, Mark Broach’s Manatuck Hill Partners and Cliff Asness’ AQR Capital Management.