We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of Dover Motorsports, Inc. (NYSE:DVD) based on that data.
Dover Motorsports, Inc. (NYSE:DVD) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 5 hedge funds’ portfolios at the end of March. At the end of this article we will also compare DVD to other stocks including Vince Holding Corp (NYSE:VNCE), Blink Charging Co. (NASDAQ:BLNK), and Acorda Therapeutics Inc (NASDAQ:ACOR) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a peek at the latest hedge fund action regarding Dover Motorsports, Inc. (NYSE:DVD).
What have hedge funds been doing with Dover Motorsports, Inc. (NYSE:DVD)?
At the end of the first quarter, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 4 hedge funds with a bullish position in DVD a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management has the number one position in Dover Motorsports, Inc. (NYSE:DVD), worth close to $2.1 million, comprising 0.1% of its total 13F portfolio. On Nantahala Capital Management’s heels is Mario Gabelli of GAMCO Investors, with a $1.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other professional money managers that are bullish comprise Paul Reeder and Edward Shapiro’s PAR Capital Management, Renaissance Technologies and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Nantahala Capital Management allocated the biggest weight to Dover Motorsports, Inc. (NYSE:DVD), around 0.08% of its 13F portfolio. PAR Capital Management is also relatively very bullish on the stock, earmarking 0.03 percent of its 13F equity portfolio to DVD.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the first quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Dover Motorsports, Inc. (NYSE:DVD) but similarly valued. We will take a look at Vince Holding Corp (NYSE:VNCE), Blink Charging Co. (NASDAQ:BLNK), Acorda Therapeutics Inc (NASDAQ:ACOR), and AmeriServ Financial, Inc. (NASDAQ:ASRV). All of these stocks’ market caps resemble DVD’s market cap.
|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 5.25 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $5 million in DVD’s case. Acorda Therapeutics Inc (NASDAQ:ACOR) is the most popular stock in this table. On the other hand Blink Charging Co. (NASDAQ:BLNK) is the least popular one with only 3 bullish hedge fund positions. Dover Motorsports, Inc. (NYSE:DVD) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and 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 8.3% in 2020 through the end of May and surpassed the market by 13.2 percentage points. Unfortunately DVD wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); DVD investors were disappointed as the stock returned 12.8% during the second quarter 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 most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.