DXC Technology Company (DXC): Hedge Funds Are Snapping Up

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of DXC Technology Company (NYSE:DXC).

DXC Technology Company (NYSE:DXC) investors should pay attention to an increase in enthusiasm from smart money lately. DXC Technology Company (NYSE:DXC) was in 33 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 60. Our calculations also showed that DXC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind let’s take a glance at the recent hedge fund action surrounding DXC Technology Company (NYSE:DXC).

Do Hedge Funds Think DXC Is A Good Stock To Buy Now?

At third quarter’s end, a total of 33 of the hedge funds tracked by Insider Monkey were long this stock, a change of 10% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in DXC over the last 25 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is DXC A Good Stock To Buy?

Among these funds, Glenview Capital held the most valuable stake in DXC Technology Company (NYSE:DXC), which was worth $188.3 million at the end of the third quarter. On the second spot was Arrowstreet Capital which amassed $136.6 million worth of shares. Miller Value Partners, Point72 Asset Management, and Archon Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Archon Capital Management allocated the biggest weight to DXC Technology Company (NYSE:DXC), around 4.47% of its 13F portfolio. Provenire Capital is also relatively very bullish on the stock, dishing out 4.17 percent of its 13F equity portfolio to DXC.

Now, some big names have been driving this bullishness. Point72 Asset Management, managed by Steve Cohen, established the largest position in DXC Technology Company (NYSE:DXC). Point72 Asset Management had $48 million invested in the company at the end of the quarter. Jinghua Yan’s TwinBeech Capital also made a $5.6 million investment in the stock during the quarter. The following funds were also among the new DXC investors: Greg Eisner’s Engineers Gate Manager, Ken Griffin’s Citadel Investment Group, and Greg Poole’s Echo Street Capital Management.

Let’s now review hedge fund activity in other stocks similar to DXC Technology Company (NYSE:DXC). We will take a look at Bright Horizons Family Solutions Inc (NYSE:BFAM), Gerdau SA (NYSE:GGB), Aramark (NYSE:ARMK), MKS Instruments, Inc. (NASDAQ:MKSI), SEI Investments Company (NASDAQ:SEIC), DigitalOcean Holdings, Inc. (NYSE:DOCN), and BanColombia S.A. (NYSE:CIB). All of these stocks’ market caps resemble DXC’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BFAM 21 96786 4
GGB 13 220161 -4
ARMK 29 1149672 -7
MKSI 28 425306 2
SEIC 26 329914 2
DOCN 27 758449 11
CIB 3 87716 0
Average 21 438286 1.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $438 million. That figure was $645 million in DXC’s case. Aramark (NYSE:ARMK) is the most popular stock in this table. On the other hand BanColombia S.A. (NYSE:CIB) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks DXC Technology Company (NYSE:DXC) is more popular among hedge funds. Our overall hedge fund sentiment score for DXC is 74.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately DXC wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on DXC were disappointed as the stock returned -10.8% since the end of the third quarter (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.