It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The S&P 500 Index gained 5.2% in the 12 month-period that ended October 30, while less than 49% of its stocks beat the benchmark. In contrast, the 30 most popular S&P 500 stocks among the hedge fund investors tracked by the Insider Monkey team returned 9.5% over the same period, which provides evidence that these money managers do have great stock picking abilities. Even more to that, 63% of these stocks managed to beat the S&P 500 Index. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like DHT Holdings Inc (NYSE:DHT).
Is DHT Holdings Inc (NYSE:DHT) a buy here? Prominent investors are in a pessimistic mood. The number of bullish hedge fund bets fell by 3 lately. At the end of this article, we will also compare DHT Holdings Inc (NYSE:DHT) to other stocks, including On Deck Capital Inc (NYSE:ONDK), Tsakos Energy Navigation Ltd. (NYSE:TNP), and Genomic Health, Inc. (NASDAQ:GHDX) to get a better sense of its popularity.
In the eyes of most shareholders, hedge funds are seen as underperforming, old investment tools of the past. While there are over 8000 funds trading at the moment, We hone in on the top tier of this club, approximately 700 funds. Most estimates calculate that this group of people orchestrates bulk of the hedge fund industry’s total capital, and by tracking their best picks, Insider Monkey has discovered numerous investment strategies that have historically outpaced the broader indices. Insider Monkey’s small-cap hedge fund strategy outrun the S&P 500 index by 12 percentage points per year for a decade in their back tests.
With all of this in mind, let’s take a peek at the new action encompassing DHT Holdings Inc (NYSE:DHT).
How are hedge funds trading DHT Holdings Inc (NYSE:DHT)?
At the end of the third quarter, a total of 30 of the hedge funds tracked by Insider Monkey were bullish on this stock, a decline of 9% from the previous quarter. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Stephen Feinberg’s Cerberus Capital Management has the biggest position in DHT Holdings Inc (NYSE:DHT), worth close to $42.5 million, accounting for 3.5% of its total 13F portfolio. Coming in second is Solus Alternative Asset Management, led by Christopher Pucillo, holding a $41.7 million position; the fund has 6.3% of its 13F portfolio invested in the stock. Other peers that hold long positions consist of Soros Fund Management, Kevin Michael Ulrich and Anthony Davis’ Anchorage Advisors, and Joshua Friedman and Mitchell Julis’ Canyon Capital Advisors.
Judging by the fact that DHT Holdings Inc (NYSE:DHT) has faced a falling interest from the entirety of the hedge funds we track, it’s safe to say that there were a few hedge funds that elected to cut their positions entirely last quarter. Interestingly, Clint Carlson’s Carlson Capital dumped the biggest investment of all the hedgies monitored by Insider Monkey, worth about $21.2 million in stock. Robert Henry Lynch’s fund, Aristeia Capital, also dumped its stock, about $18 million worth of shares. These bearish behaviors are interesting, as total hedge fund interest was cut by 3 funds last quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as DHT Holdings Inc (NYSE:DHT) but similarly valued. We will take a look at On Deck Capital Inc (NYSE:ONDK), Tsakos Energy Navigation Ltd. (NYSE:TNP), Genomic Health, Inc. (NASDAQ:GHDX), and Oritani Financial Corp. (NASDAQ:ORIT). This group of stocks’ market caps is similar to DHT Holdings Inc (NYSE:DHT)’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see, these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $182 million. That figure was $266 million in DHT Holdings Inc (NYSE:DHT)’s case. Tsakos Energy Navigation Ltd. (NYSE:TNP) is the most popular stock in this table. On the other hand, On Deck Capital Inc (NYSE:ONDK) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks, DHT Holdings Inc (NYSE:DHT) 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.