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Hedge Funds Have Never Been More Bullish On Dana Incorporated (DAN)

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Dana Incorporated (NYSE:DAN) based on that data.

Is Dana Incorporated (NYSE:DAN) a buy, sell, or hold? Prominent investors are in an optimistic mood. The number of bullish hedge fund bets improved by 1 lately. Our calculations also showed that DAN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). DAN was in 28 hedge funds’ portfolios at the end of March. There were 27 hedge funds in our database with DAN positions at the end of the previous quarter.

Video: Watch our video about the top 5 most popular hedge fund stocks.

To most shareholders, hedge funds are viewed as slow, outdated investment vehicles of the past. While there are more than 8000 funds trading at the moment, Our experts hone in on the aristocrats of this group, about 850 funds. These money managers have their hands on the majority of the hedge fund industry’s total asset base, and by tailing their inimitable equity investments, Insider Monkey has deciphered a few investment strategies that have historically exceeded Mr. Market. Insider Monkey’s flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

Richard Pzena - Pzena Investment Management

Richard S. Pzena of Pzena Investment Management

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 trades like this one as well as this tiny lithium play. 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 we’re going to take a gander at the latest hedge fund action surrounding Dana Incorporated (NYSE:DAN).

What have hedge funds been doing with Dana Incorporated (NYSE:DAN)?

At the end of the first quarter, a total of 28 of the hedge funds tracked by Insider Monkey were long this stock, a change of 4% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards DAN over the last 18 quarters. So, let’s check out 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, Richard S. Pzena’s Pzena Investment Management has the largest position in Dana Incorporated (NYSE:DAN), worth close to $30.8 million, comprising 0.2% of its total 13F portfolio. Coming in second is GAMCO Investors, led by Mario Gabelli, holding a $27.6 million position; 0.3% of its 13F portfolio is allocated to the company. Some other peers that hold long positions contain Cliff Asness’s AQR Capital Management, Ken Griffin’s Citadel Investment Group and Dmitry Balyasny’s Balyasny Asset Management. In terms of the portfolio weights assigned to each position Glendon Capital Management allocated the biggest weight to Dana Incorporated (NYSE:DAN), around 2.94% of its 13F portfolio. Moon Capital is also relatively very bullish on the stock, dishing out 2.29 percent of its 13F equity portfolio to DAN.

Consequently, key hedge funds have jumped into Dana Incorporated (NYSE:DAN) headfirst. Adage Capital Management, managed by Phill Gross and Robert Atchinson, initiated the biggest position in Dana Incorporated (NYSE:DAN). Adage Capital Management had $8.5 million invested in the company at the end of the quarter. John W. Moon’s Moon Capital also initiated a $2.4 million position during the quarter. The other funds with brand new DAN positions are Steve Cohen’s Point72 Asset Management, Tom Sandell’s Sandell Asset Management, and Benjamin A. Smith’s Laurion Capital Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Dana Incorporated (NYSE:DAN) but similarly valued. We will take a look at Altra Industrial Motion Corp. (NASDAQ:AIMC), Sykes Enterprises, Incorporated (NASDAQ:SYKE), Inogen Inc (NASDAQ:INGN), and DHT Holdings Inc (NYSE:DHT). This group of stocks’ market caps match DAN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AIMC 15 80915 0
SYKE 14 56085 -4
INGN 12 60103 -9
DHT 34 263246 0
Average 18.75 115087 -3.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.75 hedge funds with bullish positions and the average amount invested in these stocks was $115 million. That figure was $144 million in DAN’s case. DHT Holdings Inc (NYSE:DHT) is the most popular stock in this table. On the other hand Inogen Inc (NASDAQ:INGN) is the least popular one with only 12 bullish hedge fund positions. Dana Incorporated (NYSE:DAN) is not the most popular stock in this group but hedge fund interest is still above average. 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 but still beat the market by 13.2 percentage points. Hedge funds were also right about betting on DAN as the stock returned 61.8% in Q2 (through the end of May) 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.