Is Dicks Sporting Goods Inc (NYSE:DKS) a safe investment today? Investors who are in the know are becoming less confident. The number of bullish hedge fund bets were trimmed by 3 recently.
If you’d ask most investors, hedge funds are assumed to be slow, outdated investment vehicles of years past. While there are more than 8000 funds with their doors open today, we at Insider Monkey hone in on the aristocrats of this club, around 450 funds. Most estimates calculate that this group controls most of all hedge funds’ total capital, and by paying attention to their best equity investments, we have revealed a few investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Just as beneficial, bullish insider trading sentiment is another way to parse down the stock market universe. As the old adage goes: there are a number of reasons for an upper level exec to downsize shares of his or her company, but only one, very clear reason why they would behave bullishly. Various academic studies have demonstrated the market-beating potential of this method if piggybackers understand where to look (learn more here).
Consequently, we’re going to take a glance at the latest action encompassing Dicks Sporting Goods Inc (NYSE:DKS).
Hedge fund activity in Dicks Sporting Goods Inc (NYSE:DKS)
In preparation for this year, a total of 16 of the hedge funds we track held long positions in this stock, a change of -16% from the third quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their holdings considerably.
Of the funds we track, Citadel Investment Group, managed by Ken Griffin, holds the largest position in Dicks Sporting Goods Inc (NYSE:DKS). Citadel Investment Group has a $116 million position in the stock, comprising 0.2% of its 13F portfolio. Coming in second is David Keidan of Buckingham Capital Management, with a $39 million position; the fund has 3.1% of its 13F portfolio invested in the stock. Other peers with similar optimism include Alexander Mitchell’s Scopus Asset Management, Scott Burney’s Bluefin Investment Management and Louis Bacon’s Moore Global Investments.
Judging by the fact that Dicks Sporting Goods Inc (NYSE:DKS) has witnessed declining sentiment from the smart money, it’s easy to see that there was a specific group of hedgies who were dropping their full holdings heading into 2013. Interestingly, Jim Simons’s Renaissance Technologies dropped the largest position of all the hedgies we track, totaling close to $8 million in stock.. Dmitry Balyasny’s fund, Balyasny Asset Management, also sold off its stock, about $8 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 3 funds heading into 2013.
What do corporate executives and insiders think about Dicks Sporting Goods Inc (NYSE:DKS)?
Insider trading activity, especially when it’s bullish, is at its handiest when the company in focus has experienced transactions within the past six months. Over the last six-month time frame, Dicks Sporting Goods Inc (NYSE:DKS) has seen zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
With the returns demonstrated by our time-tested strategies, everyday investors must always monitor hedge fund and insider trading activity, and Dicks Sporting Goods Inc (NYSE:DKS) shareholders fit into this picture quite nicely.
Click here to learn more about Insider Monkey’s Hedge Fund Newsletter
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.