Does Dime Community Bancshares, Inc. (NASDAQ:DCOM) represent a good buying opportunity at the moment? Let’s briefly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on satellite photos and other research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail inconceivably on some occasions, but net net their stock picks have been generating superior risk-adjusted returns on average over the years.
Is Dime Community Bancshares, Inc. (NASDAQ:DCOM) worth your attention right now? The best stock pickers are selling. The number of bullish hedge fund positions were trimmed by 4 recently. Our calculations also showed that DCOM isn’t among the 30 most popular stocks among hedge funds. DCOM was in 9 hedge funds’ portfolios at the end of the fourth quarter of 2018. There were 13 hedge funds in our database with DCOM holdings at the end of the previous quarter.
If you’d ask most investors, hedge funds are assumed to be worthless, outdated financial tools of years past. While there are more than 8000 funds in operation at present, Our researchers look at the bigwigs of this club, approximately 750 funds. Most estimates calculate that this group of people orchestrate the majority of the hedge fund industry’s total capital, and by monitoring their highest performing picks, Insider Monkey has revealed a number of investment strategies that have historically exceeded Mr. Market. Insider Monkey’s flagship hedge fund strategy exceeded the S&P 500 index by nearly 5 percentage points per year since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 27.5% since February 2017 (through March 12th) even though the market was up nearly 25% during the same period. We just shared a list of 6 short targets in our latest quarterly update and they are already down an average of 6% in less than a month.
We’re going to go over the recent hedge fund action regarding Dime Community Bancshares, Inc. (NASDAQ:DCOM).
What have hedge funds been doing with Dime Community Bancshares, Inc. (NASDAQ:DCOM)?
At Q4’s end, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -31% from the second quarter of 2018. On the other hand, there were a total of 14 hedge funds with a bullish position in DCOM 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 Dime Community Bancshares, Inc. (NASDAQ:DCOM) was held by Polaris Capital Management, which reported holding $17 million worth of stock at the end of December. It was followed by Renaissance Technologies with a $7.2 million position. Other investors bullish on the company included Prospector Partners, AQR Capital Management, and Ulysses Management.
Due to the fact that Dime Community Bancshares, Inc. (NASDAQ:DCOM) has faced falling interest from the aggregate hedge fund industry, it’s safe to say that there is a sect of fund managers who sold off their full holdings last quarter. Intriguingly, Paul Magidson, Jonathan Cohen. And Ostrom Enders’s Castine Capital Management sold off the largest investment of all the hedgies monitored by Insider Monkey, worth an estimated $4.6 million in stock. John Overdeck and David Siegel’s fund, Two Sigma Advisors, also cut its stock, about $0.7 million worth. These transactions are important to note, as total hedge fund interest dropped by 4 funds last quarter.
Let’s go over hedge fund activity in other stocks similar to Dime Community Bancshares, Inc. (NASDAQ:DCOM). These stocks are SpartanNash Company (NASDAQ:SPTN), Lindblad Expeditions Holdings Inc (NASDAQ:LIND), IRSA Propiedades Comerciales S.A. (NASDAQ:IRCP), and Coherus Biosciences Inc (NASDAQ:CHRS). This group of stocks’ market values are similar to DCOM’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SPTN | 16 | 39053 | 2 |
| LIND | 14 | 108364 | 0 |
| IRCP | 5 | 11395 | 2 |
| CHRS | 20 | 106981 | -3 |
| Average | 13.75 | 66448 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $66 million. That figure was $35 million in DCOM’s case. Coherus Biosciences Inc (NASDAQ:CHRS) is the most popular stock in this table. On the other hand IRSA Propiedades Comerciales S.A. (NASDAQ:IRCP) is the least popular one with only 5 bullish hedge fund positions. Dime Community Bancshares, Inc. (NASDAQ:DCOM) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately DCOM wasn’t nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); DCOM investors were disappointed as the stock returned 13.5% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
