Should You Avoid Dicks Sporting Goods Inc (DKS)?

Because Dicks Sporting Goods Inc (NYSE:DKS) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there lies a certain “tier” of money managers that elected to cut their entire stakes by the end of the third quarter. At the top of the heap, Josh Resnick’s Jericho Capital Asset Management cut the biggest stake of all the hedgies monitored by Insider Monkey, comprising an estimated $58.1 million in stock. Paul Marshall and Ian Wace’s fund, Marshall Wace LLP, also said goodbye to its stock, about $9.6 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 3 funds by the end of the third quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Dicks Sporting Goods Inc (NYSE:DKS) but similarly valued. We will take a look at Parsley Energy Inc (NYSE:PE), EPR Properties (NYSE:EPR), Weingarten Realty Investors (NYSE:WRI), and Opko Health Inc. (NYSE:OPK). This group of stocks’ market values resemble DKS’s market value.

As you can see these stocks had an average of 24.25 hedge funds with bullish positions and the average amount invested in these stocks was $357 million. That figure was $690 million in DKS’s case. Parsley Energy Inc (NYSE:PE) is the most popular stock in this table. On the other hand Weingarten Realty Investors (NYSE:WRI) is the least popular one with only 10 bullish hedge fund positions. Dicks Sporting Goods Inc (NYSE:DKS) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard PE might be a better candidate to consider a long position.