The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. Now, we are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article you are going to find out whether hedge funds thoughtDHT Holdings Inc (NYSE:DHT) was a good investment heading into the second quarter and how the stock traded in comparison to the top hedge fund picks.
DHT Holdings Inc (NYSE:DHT) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 34 hedge funds’ portfolios at the end of March. At the end of this article we will also compare DHT to other stocks including Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT), Eldorado Resorts Inc (NASDAQ:ERI), and Enable Midstream Partners LP (NYSE:ENBL) to get a better sense of its popularity.
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If you’d ask most market participants, hedge funds are assumed to be unimportant, old investment vehicles of the past. While there are more than 8000 funds with their doors open today, Our experts choose to focus on the elite of this club, about 850 funds. It is estimated that this group of investors orchestrate bulk of the hedge fund industry’s total asset base, and by following their best equity investments, Insider Monkey has spotted various investment strategies that have historically exceeded the market. Insider Monkey’s flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s take a gander at the key hedge fund action regarding DHT Holdings Inc (NYSE:DHT).
How have hedgies been trading DHT Holdings Inc (NYSE:DHT)?
At Q1’s end, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 16 hedge funds with a bullish position in DHT a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Renaissance Technologies has the largest position in DHT Holdings Inc (NYSE:DHT), worth close to $77.9 million, corresponding to 0.1% of its total 13F portfolio. The second largest stake is held by Citadel Investment Group, managed by Ken Griffin, which holds a $28.8 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other members of the smart money that are bullish contain Jeremy Hosking’s Hosking Partners, Ryan Heslop and Ariel Warszawski’s Firefly Value Partners and Crispin Odey’s Odey Asset Management Group. In terms of the portfolio weights assigned to each position Highline Capital Management allocated the biggest weight to DHT Holdings Inc (NYSE:DHT), around 3.04% of its 13F portfolio. Firefly Value Partners is also relatively very bullish on the stock, setting aside 2.84 percent of its 13F equity portfolio to DHT.
Because DHT Holdings Inc (NYSE:DHT) has faced declining sentiment from hedge fund managers, it’s easy to see that there is a sect of fund managers that decided to sell off their full holdings by the end of the first quarter. Intriguingly, Andrew Weiss’s Weiss Asset Management dropped the largest investment of the “upper crust” of funds monitored by Insider Monkey, comprising an estimated $9.8 million in stock. Matthew L Pinz’s fund, Pinz Capital, also dumped its stock, about $3.6 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as DHT Holdings Inc (NYSE:DHT) but similarly valued. These stocks are Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT), Eldorado Resorts Inc (NASDAQ:ERI), Enable Midstream Partners LP (NYSE:ENBL), and Texas Capital Bancshares Inc (NASDAQ:TCBI). This group of stocks’ market values are closest to DHT’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $223 million. That figure was $263 million in DHT’s case. Eldorado Resorts Inc (NASDAQ:ERI) is the most popular stock in this table. On the other hand Enable Midstream Partners LP (NYSE:ENBL) is the least popular one with only 6 bullish hedge fund positions. DHT Holdings Inc (NYSE:DHT) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th but beat the market by 15.5 percentage points. Unfortunately DHT wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on DHT were disappointed as the stock returned -29.2% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.