Hedge Funds Are Coming Back To Dillard’s, Inc. (DDS)

We at Insider Monkey have gone over 867 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 September 30th. In this article, we look at what those funds think of Dillard’s, Inc. (NYSE:DDS) based on that data.

Dillard’s, Inc. (NYSE:DDS) has seen an increase in hedge fund sentiment of late. Dillard’s, Inc. (NYSE:DDS) was in 22 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 29. There were 18 hedge funds in our database with DDS positions at the end of the second quarter. Our calculations also showed that DDS isn’t among the 30 most popular stocks among hedge funds (click for Q2 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. With all of this in mind let’s take a look at the new hedge fund action regarding Dillard’s, Inc. (NYSE:DDS).


Ken Griffin of Citadel Investment Group

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

Heading into the fourth quarter of 2021, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 22% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in DDS over the last 25 quarters. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Alyeska Investment Group, managed by Anand Parekh, holds the most valuable position in Dillard’s, Inc. (NYSE:DDS). Alyeska Investment Group has a $20.8 million position in the stock, comprising 0.3% of its 13F portfolio. On Alyeska Investment Group’s heels is Marshall Wace LLP, managed by Paul Marshall and Ian Wace, which holds a $17 million position; 0.1% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that hold long positions contain Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Alyeska Investment Group allocated the biggest weight to Dillard’s, Inc. (NYSE:DDS), around 0.26% of its 13F portfolio. Quantamental Technologies is also relatively very bullish on the stock, setting aside 0.2 percent of its 13F equity portfolio to DDS.

Now, specific money managers have been driving this bullishness. Alyeska Investment Group, managed by Anand Parekh, initiated the largest position in Dillard’s, Inc. (NYSE:DDS). Alyeska Investment Group had $20.8 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $8.4 million position during the quarter. The following funds were also among the new DDS investors: Renaissance Technologies, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, and Ran Pang’s Quantamental Technologies.

Let’s check out hedge fund activity in other stocks similar to Dillard’s, Inc. (NYSE:DDS). We will take a look at LXP Industrial Trust (NYSE:LXP), Lyell Immunopharma Inc. (NASDAQ:LYEL), iHeartMedia, Inc. (NASDAQ:IHRT), FirstCash Holdings, Inc (NASDAQ:FCFS), Enable Midstream Partners LP (NYSE:ENBL), Clearway Energy, Inc. (NYSE:CWEN), and Denbury Inc. (NYSE:DEN). This group of stocks’ market values are closest to DDS’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
LXP 15 251370 -1
LYEL 10 118788 10
IHRT 28 617608 0
FCFS 15 117819 -2
ENBL 1 16132 -2
CWEN 17 151658 -4
DEN 29 856063 0
Average 16.4 304205 0.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.4 hedge funds with bullish positions and the average amount invested in these stocks was $304 million. That figure was $120 million in DDS’s case. Denbury Inc. (NYSE:DEN) 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 1 bullish hedge fund positions. Dillard’s, Inc. (NYSE:DDS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for DDS is 69.3. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on DDS as the stock returned 48% since the end of Q3 (through 12/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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