D.R. Horton, Inc. (NYSE:DHI) was in 28 hedge funds’ portfolio at the end of the fourth quarter of 2012. DHI has experienced an increase in support from the world’s most elite money managers lately. There were 25 hedge funds in our database with DHI holdings at the end of the previous quarter.
In the eyes of most shareholders, hedge funds are viewed as worthless, outdated investment vehicles of yesteryear. While there are over 8000 funds in operation at the moment, we at Insider Monkey choose to focus on the elite of this club, around 450 funds. It is estimated that this group controls the lion’s share of all hedge funds’ total asset base, and by keeping an eye on their top equity investments, we have uncovered a few investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Equally as integral, bullish insider trading sentiment is a second way to break down the investments you’re interested in. Obviously, there are many stimuli for an insider to get rid of shares of his or her company, but just one, very simple reason why they would behave bullishly. Plenty of empirical studies have demonstrated the useful potential of this tactic if shareholders understand where to look (learn more here).
With all of this in mind, we’re going to take a peek at the key action encompassing D.R. Horton, Inc. (NYSE:DHI).
Hedge fund activity in D.R. Horton, Inc. (NYSE:DHI)
At the end of the fourth quarter, a total of 28 of the hedge funds we track were bullish in this stock, a change of 12% from one quarter earlier. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their holdings considerably.
Of the funds we track, Capital Growth Management, managed by Ken Heebner, holds the largest position in D.R. Horton, Inc. (NYSE:DHI). Capital Growth Management has a $155 million billion position in the stock, comprising 4% of its 13F portfolio. Sitting at the No. 2 spot is Crispin Odey of Odey Asset Management Group, with a $91 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other hedge funds that are bullish include Stanley Druckenmiller’s Duquesne Capital, Jim Simons’s Renaissance Technologies and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
As industrywide interest jumped, key hedge funds have been driving this bullishness. Renaissance Technologies, managed by Jim Simons, established the most outsized position in D.R. Horton, Inc. (NYSE:DHI). Renaissance Technologies had 32 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $21 million position during the quarter. The following funds were also among the new DHI investors: Donald Chiboucis’s Columbus Circle Investors, Joe DiMenna’s ZWEIG DIMENNA PARTNERS, and David Harding’s Winton Capital Management.
How have insiders been trading D.R. Horton, Inc. (NYSE:DHI)?
Bullish insider trading is best served when the company we’re looking at has experienced transactions within the past 180 days. Over the last half-year time period, D.R. Horton, Inc. (NYSE:DHI) has experienced zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
With the results demonstrated by the aforementioned tactics, retail investors must always monitor hedge fund and insider trading activity, and D.R. Horton, Inc. (NYSE:DHI) applies perfectly to this mantra.
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