The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 866 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Diebold Nixdorf Incorporated (NYSE:DBD).
Is Diebold Nixdorf Incorporated (NYSE:DBD) a great investment right now? Money managers were becoming hopeful. The number of bullish hedge fund bets increased by 1 in recent months. Diebold Nixdorf Incorporated (NYSE:DBD) was in 19 hedge funds’ portfolios at the end of March. The all time high for this statistic is 21. Our calculations also showed that DBD isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 18 hedge funds in our database with DBD positions at the end of the fourth quarter.
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 115 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, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery 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 we’re going to check out the key hedge fund action surrounding Diebold Nixdorf Incorporated (NYSE:DBD).
Do Hedge Funds Think DBD Is A Good Stock To Buy Now?
At the end of March, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from the previous quarter. On the other hand, there were a total of 17 hedge funds with a bullish position in DBD a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Diebold Nixdorf Incorporated (NYSE:DBD) was held by GAMCO Investors, which reported holding $53.6 million worth of stock at the end of December. It was followed by Beach Point Capital Management with a $48.2 million position. Other investors bullish on the company included D E Shaw, Ancora Advisors, and Renaissance Technologies. In terms of the portfolio weights assigned to each position Beach Point Capital Management allocated the biggest weight to Diebold Nixdorf Incorporated (NYSE:DBD), around 10.59% of its 13F portfolio. SAYA Management is also relatively very bullish on the stock, designating 1.61 percent of its 13F equity portfolio to DBD.
As industrywide interest jumped, some big names have been driving this bullishness. SAYA Management, managed by Anand More, created the largest position in Diebold Nixdorf Incorporated (NYSE:DBD). SAYA Management had $2.3 million invested in the company at the end of the quarter. Bruce Kovner’s Caxton Associates LP also made a $0.4 million investment in the stock during the quarter. The only other fund with a brand new DBD position is Mika Toikka’s AlphaCrest Capital Management.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Diebold Nixdorf Incorporated (NYSE:DBD) but similarly valued. We will take a look at Prothena Corporation plc (NASDAQ:PRTA), Trillium Therapeutics Inc. (NASDAQ:TRIL), Omeros Corporation (NASDAQ:OMER), American Axle & Manufacturing Holdings, Inc. (NYSE:AXL), Zumiez Inc. (NASDAQ:ZUMZ), Chase Corporation (NYSE:CCF), and Boston Private Financial Hldg Inc (NASDAQ:BPFH). This group of stocks’ market values are similar to DBD’s market value.
|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 18.6 hedge funds with bullish positions and the average amount invested in these stocks was $188 million. That figure was $184 million in DBD’s case. Trillium Therapeutics Inc. (NASDAQ:TRIL) is the most popular stock in this table. On the other hand Chase Corporation (NYSE:CCF) is the least popular one with only 9 bullish hedge fund positions. Diebold Nixdorf Incorporated (NYSE:DBD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for DBD is 60.9. 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 23.8% in 2021 through July 16th and beat the market again by 7.7 percentage points. Unfortunately DBD wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on DBD were disappointed as the stock returned -21.5% since the end of March (through 7/16) 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.