It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The S&P 500 Index gained 5.2% in the 12 month-period that ended October 30, while less than 49% of its stocks beat the benchmark. In contrast, the 30 most popular S&P 500 stocks among the hedge fund investors tracked by the Insider Monkey team returned 9.5% over the same period, which provides evidence that these money managers do have great stock picking abilities. Even more to that, 63% of these stocks managed to beat the S&P 500 Index. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Dana Holding Corporation (NYSE:DAN).
Dana Holding Corporation (NYSE:DAN) was in 25 hedge funds’ portfolios at the end of the third quarter of 2015. Dana Holding Corporation (NYSE:DAN) has seen a decrease in activity from the world’s largest hedge funds of late. There were 26 hedge funds in our database with Dana Holding Corporation (NYSE:DAN) 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 Pebblebrook Hotel Trust (NYSE:PEB), Janus Capital Group Inc (NYSE:JNS), and REGAL-BELOIT CORPORATION (NYSE:RBC) to gather more data points.
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According to most stock holders, hedge funds are viewed as slow, old financial vehicles of yesteryear. While there are more than 8000 funds with their doors open at the moment, We choose to focus on the moguls of this group, around 700 funds. It is estimated that this group of investors presides over the lion’s share of the smart money’s total capital, and by tailing their first-class stock picks, Insider Monkey has deciphered various investment strategies that have historically surpassed the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy outstripped the S&P 500 index by 12 percentage points annually for a decade in their back tests.
With all of this in mind, we’re going to take a look at the latest action regarding Dana Holding Corporation (NYSE:DAN).
How are hedge funds trading Dana Holding Corporation (NYSE:DAN)?
At the end of the third quarter, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a decrease of 4% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, GAMCO Investors, managed by Mario Gabelli, holds the number one position in Dana Holding Corporation (NYSE:DAN). GAMCO Investors has a $79.2 million position in the stock, comprising 0.5% of its 13F portfolio. The second most bullish fund manager is Pzena Investment Management, led by Richard S. Pzena, holding a $65.5 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Some other peers with similar optimism comprise Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC, Chuck Royce’s Royce & Associates, and Robert Hockett’s Covalent Capital Partners.
Because Dana Holding Corporation (NYSE:DAN) has experienced a declination in interest from the entirety of the hedge funds we track, we can see that there were a few fund managers who sold off their full holdings by the end of the third quarter. At the top of the heap, Joel Greenblatt’s Gotham Asset Management dropped the largest stake of all the hedgies watched by Insider Monkey, comprising an estimated $19.3 million in stock. Zac Hirzel’s fund, Hirzel Capital Management, also said goodbye to its stock, about $15.2 million worth of stock. These moves are interesting, as aggregate hedge fund interest was cut by 1 fund by the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Dana Holding Corporation (NYSE:DAN) but similarly valued. These stocks are Pebblebrook Hotel Trust (NYSE:PEB), Janus Capital Group Inc (NYSE:JNS), REGAL-BELOIT CORPORATION (NYSE:RBC), and The Medicines Company (NASDAQ:MDCO). This group of stocks’ market caps is similar to Dana Holding Corporation (NYSE:DAN)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PEB | 5 | 13420 | -2 |
| JNS | 20 | 342201 | -1 |
| RBC | 20 | 222895 | -2 |
| MDCO | 19 | 809032 | -1 |
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 $347 million. That figure was $332 million in Dana Holding Corporation (NYSE:DAN)’s case. Janus Capital Group Inc (NYSE:JNS) is the most popular stock in this table. On the other hand, Pebblebrook Hotel Trust (NYSE:PEB) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks, Dana Holding Corporation (NYSE:DAN) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
