D.R. Horton, Inc. (NYSE:DHI) was in 29 hedge funds’ portfolio at the end of the first quarter of 2013. DHI investors should be aware of a decrease in support from the world’s most elite money managers lately. There were 30 hedge funds in our database with DHI positions at the end of the previous quarter.
According to most stock holders, hedge funds are perceived as worthless, old investment tools of years past. While there are over 8000 funds in operation at the moment, we choose to focus on the upper echelon of this group, around 450 funds. It is estimated that this group oversees the lion’s share of the hedge fund industry’s total asset base, and by paying attention to their top stock picks, we have found a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
With all of this in mind, let’s take a gander at the key action encompassing D.R. Horton, Inc. (NYSE:DHI).
Hedge fund activity in D.R. Horton, Inc. (NYSE:DHI)
In preparation for this quarter, a total of 29 of the hedge funds we track were long in this stock, a change of -3% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their stakes substantially.
According to our comprehensive database, Capital Growth Management, managed by Ken Heebner, holds the most valuable position in D.R. Horton, Inc. (NYSE:DHI). Capital Growth Management has a $147.9 million position in the stock, comprising 3.7% of its 13F portfolio. On Capital Growth Management’s heels is Crispin Odey of Odey Asset Management Group, with a $129.7 million position; 4.5% of its 13F portfolio is allocated to the company. Remaining hedgies with similar optimism include Stanley Druckenmiller’s Duquesne Capital, Ken Griffin’s Citadel Investment Group and Joe DiMenna’s ZWEIG DIMENNA PARTNERS.
Because D.R. Horton, Inc. (NYSE:DHI) has witnessed falling interest from the smart money, it’s easy to see that there were a few fund managers that decided to sell off their positions entirely in Q1. Intriguingly, Jim Simons’s Renaissance Technologies said goodbye to the largest position of all the hedgies we monitor, valued at about $31.6 million in stock., and Matthew Tewksbury of Stevens Capital Management was right behind this move, as the fund dropped about $6.4 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 1 funds in Q1.
What have insiders been doing with D.R. Horton, Inc. (NYSE:DHI)?
Insider purchases made by high-level executives is most useful when the company we’re looking at has seen transactions within the past half-year. Over the latest six-month time period, D.R. Horton, Inc. (NYSE:DHI) has experienced zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to D.R. Horton, Inc. (NYSE:DHI). These stocks are The Ryland Group, Inc. (NYSE:RYL), NVR, Inc. (NYSE:NVR), Toll Brothers Inc (NYSE:TOL), Lennar Corporation (NYSE:LEN), and PulteGroup, Inc. (NYSE:PHM). This group of stocks belong to the residential construction industry and their market caps are similar to DHI’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| The Ryland Group, Inc. (NYSE:RYL) | 16 | 0 | 0 |
| NVR, Inc. (NYSE:NVR) | 20 | 1 | 5 |
| Toll Brothers Inc (NYSE:TOL) | 26 | 0 | 6 |
| Lennar Corporation (NYSE:LEN) | 48 | 0 | 0 |
| PulteGroup, Inc. (NYSE:PHM) | 29 | 0 | 9 |
With the results exhibited by the aforementioned studies, everyday investors must always watch hedge fund and insider trading activity, and D.R. Horton, Inc. (NYSE:DHI) is no exception.
