As we already know from media reports and hedge fund investor letters, many hedge funds lost money in the third quarter, blaming macroeconomic conditions and unpredictable events that hit several sectors, with healthcare among them. Nevertheless, most investors decided to stick to their bullish theses and their long-term focus allows us to profit from the recent declines. In particular, let’s take a look at what hedge funds think about Destination XL Group Inc (NASDAQ:DXLG) in this article.
Hedge fund interest in Destination XL Group Inc (NASDAQ:DXLG) shares was flat during the last quarter, residing in 13 portfolios of investors in Insider Monkey’s database. This is usually a negative indicator. 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 Angie’s List Inc (NASDAQ:ANGI), Reading International, Inc. (NASDAQ:RDI), and Everyday Health Inc (NYSE:EVDY) to gather more data points.
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With all of this in mind, we’re going to view the fresh action regarding Destination XL Group Inc (NASDAQ:DXLG).
Hedge fund activity in Destination XL Group Inc (NASDAQ:DXLG)
Heading into Q4, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, unchanged from the previous quarter. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes meaningfully (or had already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Red Mountain Capital, managed by Willem Mesdag, holds the biggest position in Destination XL Group Inc (NASDAQ:DXLG). Red Mountain Capital has a $43.7 million position in the stock, comprising 11.6% of its 13F portfolio. The second-largest stake is held by Glenhill Advisors, led by Glenn J. Krevlin, holding a $34.8 million position; the fund has 2.7% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism contain Phil Frohlich’s Prescott Group Capital Management, Steve Tannenbaum’s Greenwood Investments, and George McCabe’s Portolan Capital Management.
Judging by the fact that Destination XL Group Inc (NASDAQ:DXLG) has witnessed level interest from hedge fund managers, logic holds that there was a specific group of money managers that slashed their positions entirely heading into Q4. Interestingly, Ken Gray and Steve Walsh’s Bryn Mawr Capital dumped the largest stake of the 700 funds tracked by Insider Monkey, valued at an estimated $2.4 million in stock. Cliff Asness’ fund, AQR Capital Management, also cut its stock, about $0.1 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Destination XL Group Inc (NASDAQ:DXLG) but similarly valued. These stocks are Angie’s List Inc (NASDAQ:ANGI), Reading International, Inc. (NASDAQ:RDI), Everyday Health Inc (NYSE:EVDY), and FRP Holdings Inc (NASDAQ:FRPH). This group of stocks’ market valuations are closest to Destination XL Group Inc’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ANGI | 11 | 53465 | -3 |
| RDI | 11 | 17327 | 2 |
| EVDY | 9 | 5724 | 2 |
| FRPH | 5 | 41001 | 0 |
As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $29 million. That figure was $115 million in Destination XL Group Inc’s case. Angie’s List Inc (NASDAQ:ANGI) is the most popular stock in this table. On the other hand FRP Holdings Inc (NASDAQ:FRPH) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Destination XL Group Inc (NASDAQ:DXLG) is more popular among hedge funds and has a lot more money invested in it. 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.
