Is Dominion Diamond Corp (DDC) Going to Burn These Hedge Funds?

Concerns over a shift in Fed’s easy monetary policy have hit several hedge funds hard during the third quarter. A number of sectors are in correction territory. More importantly, Russell 2000 ETF (IWM) underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points between June 25, 2015 and October 30, 2015. Hedge funds and institutional investors tracked by Insider Monkey usually invest a disproportionate amount of their portfolios in smaller cap stocks. We have been receiving indications that hedge funds were paring back their overall exposure and this is one of the factors behind the recent movements in major indices. In this article, we will take a closer look at hedge fund sentiment towards Dominion Diamond Corp (NYSE:DDC).

Dominion Diamond Corp (NYSE:DDC) investors should pay attention to a decrease in hedge fund sentiment lately. 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 New Senior Investment Group Inc (NYSE:SNR), Just Energy Group, Inc. Ordinary Shares (Canada) (NYSE:JE), and HeartWare International Inc (NASDAQ:HTWR) to gather more data points.

In today’s marketplace there are dozens of metrics stock traders use to appraise stocks. Two of the best metrics are hedge fund and insider trading indicators. We have shown that, historically, those who follow the best picks of the elite hedge fund managers can trounce the S&P 500 by a superb margin (see the details here).

Now, we’re going to view the key action surrounding Dominion Diamond Corp (NYSE:DDC).

What does the smart money think about Dominion Diamond Corp (NYSE:DDC)?

At the end of the third quarter, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a decline of 18% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Renaissance Technologies, managed by Jim Simons, holds the largest position in Dominion Diamond Corp (NYSE:DDC). Renaissance Technologies has a $19.1 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Renaissance Technologies’s heels is Glenhill Advisors, managed by Glenn J. Krevlin, which holds a $17.8 million position; 1.4% of its 13F portfolio is allocated to the stock. Other members of the smart money that hold long positions consist of Kurt Billick’s Bocage Capital, D. E. Shaw’s D E Shaw and Mario Gabelli’s GAMCO Investors.