Were Hedge Funds Right About 3D Systems Corporation (DDD)?

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. We at Insider Monkey have plowed through 866 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article we look at what those investors think of 3D Systems Corporation (NYSE:DDD).

Is 3D Systems Corporation (NYSE:DDD) the right investment to pursue these days? The smart money was turning bullish. The number of bullish hedge fund bets advanced by 1 recently. 3D Systems Corporation (NYSE:DDD) was in 16 hedge funds’ portfolios at the end of March. The all time high for this statistic is 19. Our calculations also showed that DDD isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 15 hedge funds in our database with DDD positions at the end of the fourth quarter.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Alan Howard

Alan Howard of Brevan Howard

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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. With all of this in mind let’s take a look at the fresh hedge fund action surrounding 3D Systems Corporation (NYSE:DDD).

Do Hedge Funds Think DDD Is A Good Stock To Buy Now?

At the end of March, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 7% from the previous quarter. On the other hand, there were a total of 18 hedge funds with a bullish position in DDD a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, holds the most valuable position in 3D Systems Corporation (NYSE:DDD). Renaissance Technologies has a $85.5 million position in the stock, comprising 0.1% of its 13F portfolio. The second most bullish fund manager is D E Shaw, led by D. E. Shaw, holding a $83.6 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions comprise Catherine D. Wood’s ARK Investment Management, Ken Griffin’s Citadel Investment Group and Philippe Laffont’s Coatue Management. In terms of the portfolio weights assigned to each position Brevan Howard allocated the biggest weight to 3D Systems Corporation (NYSE:DDD), around 0.16% of its 13F portfolio. Coatue Management is also relatively very bullish on the stock, dishing out 0.14 percent of its 13F equity portfolio to DDD.

With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Renaissance Technologies, initiated the most valuable position in 3D Systems Corporation (NYSE:DDD). Renaissance Technologies had $85.5 million invested in the company at the end of the quarter. Philippe Laffont’s Coatue Management also made a $26.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Noam Gottesman’s GLG Partners, Alan Howard’s Brevan Howard, and Paul Tudor Jones’s Tudor Investment Corp.

Let’s also examine hedge fund activity in other stocks similar to 3D Systems Corporation (NYSE:DDD). We will take a look at Visteon Corp (NASDAQ:VC), Instil Bio, Inc. (NASDAQ:TIL), BancorpSouth Bank (NYSE:BXS), Utz Brands Inc (NYSE:UTZ), Equity Commonwealth (NYSE:EQC), Cerence Inc. (NASDAQ:CRNC), and Cantel Medical Corp. (NYSE:CMD). All of these stocks’ market caps are similar to DDD’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
VC 20 196777 -3
TIL 21 778526 21
BXS 12 66932 -3
UTZ 13 110348 -2
EQC 21 183175 3
CRNC 20 213371 6
CMD 30 592747 8
Average 19.6 305982 4.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 19.6 hedge funds with bullish positions and the average amount invested in these stocks was $306 million. That figure was $316 million in DDD’s case. Cantel Medical Corp. (NYSE:CMD) is the most popular stock in this table. On the other hand BancorpSouth Bank (NYSE:BXS) is the least popular one with only 12 bullish hedge fund positions. 3D Systems Corporation (NYSE:DDD) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for DDD is 42.4. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.5% in 2021 through July 23rd and surpassed the market again by 10.1 percentage points. Unfortunately DDD wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); DDD investors were disappointed as the stock returned -5.9% since the end of March (through 7/23) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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Disclosure: None. This article was originally published at Insider Monkey.