Is Dycom Industries, Inc. (NYSE:DY) going to take off soon? Hedge funds are getting less bullish. The number of bullish hedge fund bets stayed the same which is a slightly negative development in our experience
If you’d ask most market participants, hedge funds are seen as worthless, old financial vehicles of the past. While there are over 8000 funds in operation at the moment, we at Insider Monkey hone in on the bigwigs of this club, close to 450 funds. It is widely believed that this group oversees the lion’s share of all hedge funds’ total capital, and by monitoring their best investments, we have formulated a few investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Equally as important, optimistic insider trading activity is a second way to parse down the stock market universe. Just as you’d expect, there are many motivations for an upper level exec to cut shares of his or her company, but only one, very simple reason why they would behave bullishly. Several empirical studies have demonstrated the valuable potential of this strategy if investors understand what to do (learn more here).
With these “truths” under our belt, we’re going to take a look at the latest action encompassing Dycom Industries, Inc. (NYSE:DY).
How are hedge funds trading Dycom Industries, Inc. (NYSE:DY)?
Heading into Q2, a total of 12 of the hedge funds we track held long positions in this stock, a change of 0% from the first quarter. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings significantly.
According to our comprehensive database, Peconic Partners LLC, managed by William Harnisch, holds the most valuable position in Dycom Industries, Inc. (NYSE:DY). Peconic Partners LLC has a $41.8 million position in the stock, comprising 6.5% of its 13F portfolio. The second largest stake is held by Cliff Asness of AQR Capital Management, with a $7.4 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other hedgies with similar optimism include D. E. Shaw’s D E Shaw, Israel Englander’s Millennium Management and John Overdeck and David Siegel’s Two Sigma Advisors.
Because Dycom Industries, Inc. (NYSE:DY) has faced falling interest from the smart money, it’s safe to say that there exists a select few money managers who were dropping their full holdings in Q1. Intriguingly, David Costen Haley’s HBK Investments dropped the biggest position of all the hedgies we monitor, totaling close to $0.5 million in stock., and Steven Cohen of SAC Capital Advisors was right behind this move, as the fund dumped about $0.4 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What do corporate executives and insiders think about Dycom Industries, Inc. (NYSE:DY)?
Bullish insider trading is particularly usable when the company in question has experienced transactions within the past six months. Over the last 180-day time frame, Dycom Industries, Inc. (NYSE:DY) has experienced zero unique insiders buying, and 2 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Dycom Industries, Inc. (NYSE:DY). These stocks are Matrix Service Co (NASDAQ:MTRX), Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD), Layne Christensen Company (NASDAQ:LAYN), Tutor Perini Corp (NYSE:TPC), and Aegion Corp – Class A (NASDAQ:AEGN). This group of stocks are in the heavy construction industry and their market caps are similar to DY’s market cap.