Hedge funds are not perfect. They have their bad picks just like everyone else. Micron, a stock hedge funds have loved, lost 50% during the last 12 months ending in October 30. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% in the same time period, vs. a gain of 5.2% for the S&P 500 Index. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of Destination Maternity Corp (NASDAQ:DEST).
Is Destination Maternity Corp (NASDAQ:DEST) undervalued? The smart money is taking a bearish view. The number of long hedge fund bets fell by 2 in recent months. DEST was in 11 hedge funds’ portfolios at the end of the third quarter of 2015. There were 13 hedge funds in our database with DEST positions at the end of the previous quarter. At the end of this article we will also compare DEST to other stocks, including Southern First Bancshares, Inc. (NASDAQ:SFST), L.B. Foster Company (NASDAQ:FSTR), and Summit Therapeutics PLC (ADR) (NASDAQ:SMMT) to get a better sense of its popularity.
At the moment there are tons of methods market participants have at their disposal to value publicly traded companies. Some of the most under-the-radar methods are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the best picks of the top investment managers can outclass the market by a solid amount (see the details here).
Now, we’re going to view the fresh action regarding Destination Maternity Corp (NASDAQ:DEST).
What does the smart money think about Destination Maternity Corp (NASDAQ:DEST)?
At the end of the third quarter, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -15% from the previous quarter. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings significantly (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 Destination Maternity Corp (NASDAQ:DEST). Royce & Associates has a $13.7 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish comprise George McCabe’s Portolan Capital Management, Andy Redleaf’s Whitebox Advisors and Steve Tannenbaum’s Greenwood Investments.