Here is What Hedge Funds Think About Dana Incorporated (DAN)

At Insider Monkey, we pore over the filings of nearly 873 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of June 30th. In this article, we will use that wealth of knowledge to determine whether or not Dana Incorporated (NYSE:DAN) makes for a good investment right now.

Dana Incorporated (NYSE:DAN) shareholders have witnessed a decrease in hedge fund interest lately. Dana Incorporated (NYSE:DAN) was in 24 hedge funds’ portfolios at the end of June. The all time high for this statistic is 28. Our calculations also showed that DAN isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

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. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now let’s take a gander at the new hedge fund action regarding Dana Incorporated (NYSE:DAN).

Do Hedge Funds Think DAN Is A Good Stock To Buy Now?

Heading into the third quarter of 2021, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards DAN over the last 24 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, Carl Icahn’s Icahn Capital LP has the biggest position in Dana Incorporated (NYSE:DAN), worth close to $286 million, comprising 1.2% of its total 13F portfolio. The second most bullish fund manager is GAMCO Investors, managed by Mario Gabelli, which holds a $76.2 million position; 0.6% of its 13F portfolio is allocated to the company. Some other peers with similar optimism encompass Richard S. Pzena’s Pzena Investment Management, Chuck Royce’s Royce & Associates and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Brightline Capital allocated the biggest weight to Dana Incorporated (NYSE:DAN), around 10.79% of its 13F portfolio. Elm Ridge Capital is also relatively very bullish on the stock, designating 2.96 percent of its 13F equity portfolio to DAN.

Seeing as Dana Incorporated (NYSE:DAN) has faced falling interest from the smart money, we can see that there exists a select few fund managers that elected to cut their full holdings last quarter. Intriguingly, Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management dumped the biggest investment of all the hedgies watched by Insider Monkey, valued at about $2.3 million in stock. Gregg Moskowitz’s fund, Interval Partners, also dropped its stock, about $0.7 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 2 funds last quarter.

Let’s check out hedge fund activity in other stocks similar to Dana Incorporated (NYSE:DAN). These stocks are Advantage Solutions Inc. (NASDAQ:ADV), SSR Mining Inc. (NASDAQ:SSRM), Tronox Holdings Plc (NYSE:TROX), Cassava Sciences, Inc. (NASDAQ:SAVA), Cornerstone OnDemand, Inc. (NASDAQ:CSOD), Apple Hospitality REIT Inc (NYSE:APLE), and Taylor Morrison Home Corp (NYSE:TMHC). This group of stocks’ market values are closest to DAN’s market value.

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As you can see these stocks had an average of 22.4 hedge funds with bullish positions and the average amount invested in these stocks was $340 million. That figure was $549 million in DAN’s case. Tronox Holdings Plc (NYSE:TROX) is the most popular stock in this table. On the other hand Cassava Sciences, Inc. (NASDAQ:SAVA) is the least popular one with only 13 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 overall hedge fund sentiment score for DAN is 52.6. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through October 22nd and beat the market again by 1.6 percentage points. Unfortunately DAN wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on DAN were disappointed as the stock returned 3.2% since the end of June (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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