We at Insider Monkey have gone over 730 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 June 28th. In this article, we look at what those funds think of Denison Mines Corp (NYSEAMEX:DNN) based on that data.
Hedge fund interest in Denison Mines Corp (NYSEAMEX:DNN) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Ryerson Holding Corporation (NYSE:RYI), Westwood Holdings Group, Inc. (NYSE:WHG), and Harpoon Therapeutics, Inc. (NASDAQ:HARP) to gather more data points. Our calculations also showed that DNN isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 25.7% through September 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
In addition to following the biggest hedge funds for investment ideas, we also share stock pitches from conferences, investor letters and other sources like this one where the fund manager is talking about two under the radar 1000% return potential stocks: first one in internet infrastructure and the second in the heart of advertising market. We use hedge fund buy/sell signals to determine whether to conduct in-depth analysis of these stock ideas which take days. Let’s take a peek at the recent hedge fund action regarding Denison Mines Corp (NYSEAMEX:DNN).
What does smart money think about Denison Mines Corp (NYSEAMEX:DNN)?
At the end of the second quarter, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in DNN over the last 16 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Falcon Edge Capital, managed by Richard Gerson and Navroz D. Udwadia, holds the number one position in Denison Mines Corp (NYSEAMEX:DNN). Falcon Edge Capital has a $1.6 million position in the stock, comprising 0.1% of its 13F portfolio. On Falcon Edge Capital’s heels is Renaissance Technologies, holding a $0 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other peers that hold long positions include Ken Griffin’s Citadel Investment Group, Eric Sprott’s Sprott Asset Management and Ken Griffin’s Citadel Investment Group.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the second quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Denison Mines Corp (NYSEAMEX:DNN) but similarly valued. We will take a look at Ryerson Holding Corporation (NYSE:RYI), Westwood Holdings Group, Inc. (NYSE:WHG), Harpoon Therapeutics, Inc. (NASDAQ:HARP), and Tecnoglass Inc. (NASDAQ:TGLS). This group of stocks’ market caps match DNN’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.5 hedge funds with bullish positions and the average amount invested in these stocks was $35 million. That figure was $2 million in DNN’s case. Ryerson Holding Corporation (NYSE:RYI) is the most popular stock in this table. On the other hand Tecnoglass Inc. (NASDAQ:TGLS) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Denison Mines Corp (NYSEAMEX:DNN) is even less popular than TGLS. Hedge funds dodged a bullet by taking a bearish stance towards DNN. Our calculations showed that the top 20 most popular hedge fund stocks returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately DNN wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); DNN investors were disappointed as the stock returned -15.1% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far in 2019.
Disclosure: None. This article was originally published at Insider Monkey.