The successful funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at DCT Industrial Trust Inc (NYSE:DCT) from the perspective of those successful funds.
DCT Industrial Trust Inc (NYSE:DCT) has experienced a decrease in activity from the world’s largest hedge funds lately. There were 12 hedge funds in our database with DCT positions at the end of the previous quarter. 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 IPG Photonics Corporation (NASDAQ:IPGP), Teradyne, Inc. (NYSE:TER), and Companhia Brasileira de Distrib. (ADR) (NYSE:CBD) to gather more data points.
We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.
With all of this in mind, let’s check out the latest action surrounding DCT Industrial Trust Inc (NYSE:DCT).
What have hedge funds been doing with DCT Industrial Trust Inc (NYSE:DCT)?
Heading into the fourth quarter of 2016, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from the previous quarter. By comparison, 12 hedge funds held shares or bullish call options in DCT heading into this year. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Millennium Management, one of the 10 largest hedge funds in the world has the largest position in DCT Industrial Trust Inc (NYSE:DCT), worth close to $86.9 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by Citadel Investment Group, led by Ken Griffin, holding a $12.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism comprise Dmitry Balyasny’s Balyasny Asset Management, Matthew Tewksbury’s Stevens Capital Management and D. E. Shaw’s D E Shaw. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.