Should You Buy Dominion Resources, Inc. (D)?

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With a general bullishness amongst the heavyweights, key money managers were leading the bulls’ herd. Carlson Capital, managed by Clint Carlson, created the biggest position in Dominion Resources, Inc. (NYSE:D). Carlson Capital had $16 million invested in the company at the end of the quarter. D E Shaw also initiated a $5.5 million position during the quarter. The following funds were also among the new Dominion Resources, Inc. (NYSE:D) investors: Peter Muller’s PDT Partners, Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital, and Richard Driehaus’ Driehaus Capital.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Dominion Resources, Inc. (NYSE:D) but similarly valued. These stocks are Phillips 66 (NYSE:PSX), Shire PLC (ADR) (NASDAQ:SHPG), Adobe Systems Incorporated (NASDAQ:ADBE), and FedEx Corporation (NYSE:FDX). This group of stocks’ market valuations is closest to Dominion Resources, Inc. (NYSE:D)’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PSX 33 6722714 -2
SHPG 43 2498587 -1
ADBE 42 4069926 3
FDX 53 4136169 1

As you can see, these stocks had an average of 43 hedge funds with bullish positions and the average amount invested in these stocks was $4.36 billion. That figure was $397 million in Dominion Resources, Inc. (NYSE:D)’s case. FedEx Corporation (NYSE:FDX) is the most popular stock in this table. On the other hand, Phillips 66 (NYSE:PSX) is the least popular one with only 33 bullish hedge fund positions. Compared to these stocks, Dominion Resources, Inc. (NYSE:D) is even less popular than Phillips 66 (NYSE:PSX). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case, more research is warranted.

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