The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 817 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2020. What do these smart investors think about DXP Enterprises Inc (NASDAQ:DXPE)?
Is DXPE a good stock to buy now? DXP Enterprises Inc (NASDAQ:DXPE) was in 10 hedge funds’ portfolios at the end of September. The all time high for this statistics is 16. DXPE investors should pay attention to an increase in enthusiasm from smart money lately. There were 8 hedge funds in our database with DXPE holdings at the end of June. Our calculations also showed that DXPE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are a lot of signals investors put to use to appraise their stock investments. Two of the most underrated signals are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the top hedge fund managers can outclass their index-focused peers by a significant amount (see the details here).
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. Keeping this in mind we’re going to check out the latest hedge fund action regarding DXP Enterprises Inc (NASDAQ:DXPE).
Do Hedge Funds Think DXPE Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from the previous quarter. The graph below displays the number of hedge funds with bullish position in DXPE over the last 21 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Nantahala Capital Management was the largest shareholder of DXP Enterprises Inc (NASDAQ:DXPE), with a stake worth $24.2 million reported as of the end of September. Trailing Nantahala Capital Management was Arrowstreet Capital, which amassed a stake valued at $1.5 million. AQR Capital Management, Citadel Investment Group, and Renaissance Technologies 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 Nantahala Capital Management allocated the biggest weight to DXP Enterprises Inc (NASDAQ:DXPE), around 0.74% of its 13F portfolio. Algert Coldiron Investors is also relatively very bullish on the stock, designating 0.08 percent of its 13F equity portfolio to DXPE.
As industrywide interest jumped, key hedge funds were breaking ground themselves. Renaissance Technologies, assembled the largest position in DXP Enterprises Inc (NASDAQ:DXPE). Renaissance Technologies had $0.7 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also made a $0.3 million investment in the stock during the quarter. The only other fund with a new position in the stock is Matthew Hulsizer’s PEAK6 Capital Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as DXP Enterprises Inc (NASDAQ:DXPE) but similarly valued. We will take a look at Funko, Inc. (NASDAQ:FNKO), Peapack-Gladstone Financial Corp (NASDAQ:PGC), Affimed NV (NASDAQ:AFMD), Aldeyra Therapeutics Inc (NASDAQ:ALDX), Orphazyme A/S (NASDAQ:ORPH), Sunlands Technology Group (NYSE:STG), and Landec Corporation (NASDAQ:LNDC). This group of stocks’ market values are closest to DXPE’s market value.
|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 11 hedge funds with bullish positions and the average amount invested in these stocks was $44 million. That figure was $29 million in DXPE’s case. Aldeyra Therapeutics Inc (NASDAQ:ALDX) is the most popular stock in this table. On the other hand Sunlands Technology Group (NYSE:STG) is the least popular one with only 1 bullish hedge fund positions. DXP Enterprises Inc (NASDAQ:DXPE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for DXPE is 53.9. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on DXPE as the stock returned 43.3% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.