Hedge Fund Sentiment Is Stagnant On Dicks Sporting Goods Inc (DKS)

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Dicks Sporting Goods Inc (NYSE:DKS) based on that data.

Hedge fund interest in Dicks Sporting Goods Inc (NYSE:DKS) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that DKS isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). At the end of this article we will also compare DKS to other stocks including GDS Holdings Limited (NASDAQ:GDS), Cemex SAB de CV (NYSE:CX), and Ozon Holdings PLC (NASDAQ:OZON) to get a better sense of its popularity.

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. Now we’re going to go over the new hedge fund action regarding Dicks Sporting Goods Inc (NYSE:DKS).

Peter Rathjens Arrowstreet Capital 394

Peter Rathjens of Arrowstreet Capital

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

At Q3’s end, a total of 36 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. By comparison, 41 hedge funds held shares or bullish call options in DKS a year ago. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Israel Englander’s Millennium Management has the most valuable position in Dicks Sporting Goods Inc (NYSE:DKS), worth close to $404.6 million, corresponding to 0.2% of its total 13F portfolio. On Millennium Management’s heels is Atreides Management, managed by Gavin Baker, which holds a $386.6 million position; the fund has 9.1% of its 13F portfolio invested in the stock. Some other peers that are bullish contain Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Robert Pohly’s Samlyn Capital and Douglas Dossey and Arthur Young’s Tensile Capital. In terms of the portfolio weights assigned to each position Atreides Management allocated the biggest weight to Dicks Sporting Goods Inc (NYSE:DKS), around 9.13% of its 13F portfolio. Tensile Capital is also relatively very bullish on the stock, dishing out 8.8 percent of its 13F equity portfolio to DKS.

Seeing as Dicks Sporting Goods Inc (NYSE:DKS) has experienced bearish sentiment from the smart money, logic holds that there exists a select few fund managers that elected to cut their positions entirely in the third quarter. It’s worth mentioning that Andy Redleaf’s Whitebox Advisors dumped the biggest investment of all the hedgies watched by Insider Monkey, worth about $41.4 million in stock, and Ken Heebner’s Capital Growth Management was right behind this move, as the fund dumped about $36.1 million worth. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s check out hedge fund activity in other stocks similar to Dicks Sporting Goods Inc (NYSE:DKS). These stocks are GDS Holdings Limited (NASDAQ:GDS), Cemex SAB de CV (NYSE:CX), Ozon Holdings PLC (NASDAQ:OZON), Regal Beloit Corporation (NYSE:RBC), Acceleron Pharma Inc (NASDAQ:XLRN), Global-E Online Ltd. (NASDAQ:GLBE), and Natera Inc (NASDAQ:NTRA). All of these stocks’ market caps match DKS’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GDS 24 1018195 -14
CX 19 438842 -4
OZON 13 203434 -6
RBC 30 526548 -1
XLRN 58 2613991 15
GLBE 22 1002171 22
NTRA 50 1800268 -2
Average 30.9 1086207 1.4

View table here if you experience formatting issues.

As you can see these stocks had an average of 30.9 hedge funds with bullish positions and the average amount invested in these stocks was $1086 million. That figure was $1616 million in DKS’s case. Acceleron Pharma Inc (NASDAQ:XLRN) is the most popular stock in this table. On the other hand Ozon Holdings PLC (NASDAQ:OZON) is the least popular one with only 13 bullish hedge fund positions. Dicks Sporting Goods Inc (NYSE:DKS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for DKS is 55.1. 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. 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 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 beat the market again by 5.6 percentage points. Unfortunately DKS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on DKS were disappointed as the stock returned -1.8% since the end of September (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 many of these stocks already outperformed the market since 2019.

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