Is DTS Inc. (DTSI) Going to Burn These Hedge Funds?

Due to the fact that DTS Inc. (NASDAQ:DTSI) has faced a decline in interest from the aggregate hedge fund industry, it’s safe to say that there were a few hedge funds that decided to sell off their positions entirely heading into Q4. Intriguingly, Paul Marshall and Ian Wace’s Marshall Wace LLP dropped the biggest stake of all the hedgies monitored by Insider Monkey, comprising about $2.9 million in stock. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also cut its stock, about $0.5 million worth. These moves are interesting, as total hedge fund interest was cut by 1 funds heading into Q4.

Let’s now review hedge fund activity in other stocks similar to DTS Inc. (NASDAQ:DTSI). We will take a look at Gores Holdings Inc (NASDAQ:GRSH), First PacTrust Bancorp, Inc. (NASDAQ:BANC), Rentech Nitrogen Partners LP (NYSE:RNF), and Opower Inc (NYSE:OPWR). All of these stocks’ market caps are closest to DTSI’s market cap.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $72 million. That figure was $95 million in DTSI’s case. First PacTrust Bancorp, Inc. (NASDAQ:BANC) is the most popular stock in this table. On the other hand Rentech Nitrogen Partners LP (NYSE:RNF) is the least popular one with only 5 bullish hedge fund positions. DTS Inc. (NASDAQ:DTSI) 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 piling on. In this regard BANC might be a better candidate to consider a long position.