In this article we will take a look at whether hedge funds think Dicks Sporting Goods Inc (NYSE:DKS) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is DKS stock a buy or sell? Dicks Sporting Goods Inc (NYSE:DKS) has experienced an increase in hedge fund interest recently. Dicks Sporting Goods Inc (NYSE:DKS) was in 42 hedge funds’ portfolios at the end of December. The all time high for this statistic is 44. There were 41 hedge funds in our database with DKS holdings at the end of September. Our calculations also showed that DKS isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
Clint Carlson of Carlson Capital
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Do Hedge Funds Think DKS Is A Good Stock To Buy Now?
At Q4’s end, a total of 42 of the hedge funds tracked by Insider Monkey were long this stock, a change of 2% from the third quarter of 2020. On the other hand, there were a total of 26 hedge funds with a bullish position in DKS a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Dicks Sporting Goods Inc (NYSE:DKS) was held by Atreides Management, which reported holding $92.8 million worth of stock at the end of December. It was followed by Samlyn Capital with a $91.2 million position. Other investors bullish on the company included Balyasny Asset Management, AQR Capital Management, and Carlson Capital. In terms of the portfolio weights assigned to each position Tensile Capital allocated the biggest weight to Dicks Sporting Goods Inc (NYSE:DKS), around 5.14% of its 13F portfolio. MIK Capital is also relatively very bullish on the stock, dishing out 5.11 percent of its 13F equity portfolio to DKS.
As one would reasonably expect, some big names have jumped into Dicks Sporting Goods Inc (NYSE:DKS) headfirst. Atreides Management, managed by Gavin Baker, established the most outsized position in Dicks Sporting Goods Inc (NYSE:DKS). Atreides Management had $92.8 million invested in the company at the end of the quarter. Robert Pohly’s Samlyn Capital also initiated a $91.2 million position during the quarter. The following funds were also among the new DKS investors: Anand Parekh’s Alyeska Investment Group, Robert Bishop’s Impala Asset Management, and Larry Foley and Paul Farrell’s Bronson Point Partners.
Let’s now review hedge fund activity in other stocks similar to Dicks Sporting Goods Inc (NYSE:DKS). We will take a look at MasTec, Inc. (NYSE:MTZ), Brooks Automation, Inc. (NASDAQ:BRKS), Kemper Corporation (NYSE:KMPR), Emcor Group Inc (NYSE:EME), Digital Turbine Inc (NASDAQ:APPS), Medallia, Inc. (NYSE:MDLA), and Regal Beloit Corporation (NYSE:RBC). All of these stocks’ market caps resemble DKS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MTZ | 32 | 349801 | -3 |
| BRKS | 25 | 173905 | 8 |
| KMPR | 13 | 44437 | -5 |
| EME | 25 | 169975 | -4 |
| APPS | 23 | 318095 | 0 |
| MDLA | 21 | 428312 | -3 |
| RBC | 25 | 308385 | 0 |
| Average | 23.4 | 256130 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.4 hedge funds with bullish positions and the average amount invested in these stocks was $256 million. That figure was $711 million in DKS’s case. MasTec, Inc. (NYSE:MTZ) is the most popular stock in this table. On the other hand Kemper Corporation (NYSE:KMPR) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Dicks Sporting Goods Inc (NYSE:DKS) is more popular among hedge funds. Our overall hedge fund sentiment score for DKS is 84.6. 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. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks returned 5.3% in 2021 through March 19th but still managed to beat the market by 0.8 percentage points. Hedge funds were also right about betting on DKS as the stock returned 44% since the end of December (through 3/19) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Follow Dick's Sporting Goods Inc. (NYSE:DKS)
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Disclosure: None. This article was originally published at Insider Monkey.
