DTS Inc. (DTSI): Are Hedge Funds Right About This Stock?

As industrywide interest jumped, specific money managers have been driving this bullishness. Sand Grove Capital Partners created the most outsized position in DTS Inc. (NASDAQ:DTSI). According to regulatory filings, the fund had $18.6 million invested in the company at the end of the quarter. Magnetar Capital also initiated a $13.9 million position during the quarter. The other funds with brand new DTSI positions are Gilchrist Berg’s Water Street Capital, D. E. Shaw’s D E Shaw, and Mario Gabelli’s GAMCO Investors.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as DTS Inc. (NASDAQ:DTSI) but similarly valued. These stocks are CorVel Corporation (NASDAQ:CRVL), National Storage Affiliates Trust (NYSE:NSA), K2M Group Holdings Inc (NASDAQ:KTWO), and Just Energy Group, Inc. Ordinary Shares (Canada) (NYSE:JE). This group of stocks’ market caps resemble DTSI’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CRVL 11 66449 -2
NSA 12 68930 -9
KTWO 10 50490 -1
JE 9 15531 -2

As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $50 million. That figure was $153 million in DTSI’s case. National Storage Affiliates Trust (NYSE:NSA) is the most popular stock in this table. On the other hand Just Energy Group, Inc. Ordinary Shares (Canada) (NYSE:JE) is the least popular one with only 9 bullish hedge fund positions. DTS Inc. (NASDAQ:DTSI) 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. In this regard NSA might be a better candidate to consider taking a long position in.

Disclosure: none.