Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Hedge Funds Are Crazy About HD Supply Holdings Inc (HDS)

Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: HD Supply Holdings Inc (NASDAQ:HDS).

HD Supply Holdings Inc (NASDAQ:HDS) investors should pay attention to an increase in hedge fund interest recently. Our calculations also showed that HDS isn’t among the 30 most popular stocks among hedge funds.

In the financial world there are dozens of indicators investors have at their disposal to value stocks. Two of the most underrated indicators are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the top picks of the best hedge fund managers can outpace the market by a healthy margin (see the details here).

Barry Rosenstein JANA PARTNERS

We’re going to analyze the fresh hedge fund action regarding HD Supply Holdings Inc (NASDAQ:HDS).

What does the smart money think about HD Supply Holdings Inc (NASDAQ:HDS)?

At the end of the third quarter, a total of 38 of the hedge funds tracked by Insider Monkey were long this stock, a change of 15% from the second quarter of 2018. By comparison, 42 hedge funds held shares or bullish call options in HDS heading into this year. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).


Among these funds, JANA Partners held the most valuable stake in HD Supply Holdings Inc (NASDAQ:HDS), which was worth $257.5 million at the end of the third quarter. On the second spot was AQR Capital Management which amassed $174.4 million worth of shares. Moreover, Citadel Investment Group, OZ Management, and Iridian Asset Management were also bullish on HD Supply Holdings Inc (NASDAQ:HDS), allocating a large percentage of their portfolios to this stock.

As aggregate interest increased, some big names were breaking ground themselves. Wexford Capital, managed by Charles Davidson and Joseph Jacobs, initiated the largest position in HD Supply Holdings Inc (NASDAQ:HDS). Wexford Capital had $3.3 million invested in the company at the end of the quarter. Nick Niell’s Arrowgrass Capital Partners also made a $3.2 million investment in the stock during the quarter. The other funds with brand new HDS positions are George Zweig, Shane Haas and Ravi Chander’s Signition LP, Thomas Bailard’s Bailard Inc, and Bruce Kovner’s Caxton Associates LP.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as HD Supply Holdings Inc (NASDAQ:HDS) but similarly valued. These stocks are ON Semiconductor Corporation (NASDAQ:ON), MGM Growth Properties LLC (NYSE:MGP), Macerich Company (NYSE:MAC), and Brookfield Property Partners LP (NASDAQ:BPY). This group of stocks’ market values are similar to HDS’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ON 27 336908 2
MGP 15 222330 1
MAC 30 409391 -8
BPY 11 136100 8
Average 20.75 276182 0.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 20.75 hedge funds with bullish positions and the average amount invested in these stocks was $276 million. That figure was $1.43 billion in HDS’s case. The Macerich Company (NYSE:MAC) is the most popular stock in this table. On the other hand Brookfield Property Partners LP (NASDAQ:BPY) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks HD Supply Holdings Inc (NASDAQ:HDS) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

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

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.