The Insider Monkey team has completed processing the quarterly 13F filings for the December quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards DuPont de Nemours Inc (NYSE:DD).
Is DuPont (DD) stock a buy or sell? Prominent investors were taking a bearish view. The number of bullish hedge fund positions shrunk by 1 recently. DuPont de Nemours Inc (NYSE:DD) was in 60 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 82. Our calculations also showed that DD isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
In the financial world there are a multitude of signals market participants employ to value their stock investments. A couple of the less utilized signals are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the elite investment managers can trounce the market by a significant margin (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. Recently Oregon became the first state to legalize psychedelic mushrooms which are shown to have promising results in treating depression, addiction, and PTSD in early stage academic studies. So, we are checking out this psychedelic drug stock idea right now. We go through lists like the 10 best biotech stocks to invest in to pick the next stock that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage (or at the end of this article). With all of this in mind let’s analyze the new hedge fund action surrounding DuPont de Nemours Inc (NYSE:DD).
Do Hedge Funds Think DD Is A Good Stock To Buy Now?
At the end of the fourth quarter, a total of 60 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -2% from the previous quarter. The graph below displays the number of hedge funds with bullish position in DD over the last 22 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, 40 North Management held the most valuable stake in DuPont de Nemours Inc (NYSE:DD), which was worth $1441.1 million at the end of the fourth quarter. On the second spot was Ursa Fund Management which amassed $702.7 million worth of shares. Citadel Investment Group, Millennium Management, and D E Shaw were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Ursa Fund Management allocated the biggest weight to DuPont de Nemours Inc (NYSE:DD), around 43.73% of its 13F portfolio. 40 North Management is also relatively very bullish on the stock, setting aside 43.43 percent of its 13F equity portfolio to DD.
Because DuPont de Nemours Inc (NYSE:DD) has witnessed a decline in interest from the aggregate hedge fund industry, we can see that there were a few hedge funds that elected to cut their positions entirely in the fourth quarter. Interestingly, Zach Schreiber’s Point State Capital cut the largest position of the “upper crust” of funds tracked by Insider Monkey, valued at close to $75.9 million in stock, and Eli Samaha’s Madison Avenue Partners was right behind this move, as the fund sold off about $37.5 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 1 funds in the fourth quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as DuPont de Nemours Inc (NYSE:DD) but similarly valued. We will take a look at Regeneron Pharmaceuticals Inc (NASDAQ:REGN), Dollar General Corp. (NYSE:DG), ICICI Bank Limited (NYSE:IBN), Boston Scientific Corporation (NYSE:BSX), Northrop Grumman Corporation (NYSE:NOC), UBS Group AG (NYSE:UBS), and Southern Copper Corporation (NYSE:SCCO). This group of stocks’ market caps are similar to DD’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 38.7 hedge funds with bullish positions and the average amount invested in these stocks was $1427 million. That figure was $6277 million in DD’s case. Boston Scientific Corporation (NYSE:BSX) is the most popular stock in this table. On the other hand UBS Group AG (NYSE:UBS) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks DuPont de Nemours Inc (NYSE:DD) is more popular among hedge funds. Our overall hedge fund sentiment score for DD is 76. 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 DD as the stock returned 8.9% 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.
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Disclosure: None. This article was originally published at Insider Monkey.