Insider Monkey finished processing more than 700 13F filings made by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30. In this article we are going to take a look at smart money sentiment towards DST Systems, Inc. (NYSE:DST).
Is DST Systems, Inc. (NYSE:DST) a healthy stock for your portfolio? Investors who are in the know are reducing their bets on the stock. The number of long hedge fund bets decreased by 1 lately. DST was in 24 hedge funds’ portfolios at the end of September. There were 25 hedge funds in our database with DST positions at the end of the previous quarter. At the end of this article we will also compare DST to other stocks including MSC Industrial Direct Co Inc (NYSE:MSM), Cinemark Holdings, Inc. (NYSE:CNK), and Amsurg Corp (NASDAQ:AMSG) to get a better sense of its popularity.
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In the financial world there are several methods shareholders can use to value stocks. A couple of the most under-the-radar methods are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the top fund managers can beat the market by a superb margin (see the details here).
Now, we’re going to take a glance at the latest action encompassing DST Systems, Inc. (NYSE:DST).
How are hedge funds trading DST Systems, Inc. (NYSE:DST)?
At Q3’s end, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Scopia Capital, managed by Matt Sirovich and Jeremy Mindich, holds the most valuable position in DST Systems, Inc. (NYSE:DST). Scopia Capital has an $116.6 million position in the stock, comprising 2.5% of its 13F portfolio. The second most bullish fund manager is AQR Capital Management, managed by Cliff Asness, which holds an $68.5 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions encompass Joel Greenblatt’s Gotham Asset Management, David Costen Haley’s HBK Investments and Martin Whitman’s Third Avenue Management.
Since DST Systems, Inc. (NYSE:DST) has experienced bearish sentiment from the smart money, logic holds that there exist a select few fund managers that slashed their positions entirely heading into Q4. Intriguingly, Clifford Fox’s Columbus Circle Investors sold off the largest investment of the “upper crust” of funds tracked by Insider Monkey, worth about $48.7 million in stock, and Jim Simons’s Renaissance Technologies was right behind this move, as the fund dumped about $7.7 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 1 funds heading into Q4.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as DST Systems, Inc. (NYSE:DST) but similarly valued. These stocks are MSC Industrial Direct Co Inc (NYSE:MSM), Cinemark Holdings, Inc. (NYSE:CNK), Amsurg Corp (NASDAQ:AMSG), and Restoration Hardware Holdings Inc (NYSE:RH). This group of stocks’ market valuations resemble DST’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MSM | 22 | 606231 | 7 |
| CNK | 19 | 274328 | 0 |
| AMSG | 22 | 171808 | 0 |
| RH | 39 | 972730 | -2 |
As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $506 million. That figure was $279 million in DST’s case. Restoration Hardware Holdings Inc (NYSE:RH) is the most popular stock in this table. On the other hand Cinemark Holdings, Inc. (NYSE:CNK) is the least popular one with only 19 bullish hedge fund positions. DST Systems, Inc. (NYSE:DST) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal, and we’d rather spend our time researching stocks that hedge funds are most collectively bullish on, such as RH in this group.
