Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the third quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of Dana Incorporated (NYSE:DAN) based on that data.
Is DAN a good stock to buy now? Investors who are in the know were turning less bullish. The number of long hedge fund positions were trimmed by 3 lately. Dana Incorporated (NYSE:DAN) was in 22 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 28. Our calculations also showed that DAN 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.
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Richard S. Pzena of Pzena Investment Management
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. Now let's take a glance at the recent hedge fund action regarding Dana Incorporated (NYSE:DAN).
Do Hedge Funds Think DAN Is A Good Stock To Buy Now?
At Q3's end, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -12% from the previous quarter. On the other hand, there were a total of 27 hedge funds with a bullish position in DAN a year ago. With the smart money's sentiment swirling, there exists a select group of notable hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
Among these funds, Pzena Investment Management held the most valuable stake in Dana Incorporated (NYSE:DAN), which was worth $42.4 million at the end of the third quarter. On the second spot was GAMCO Investors which amassed $39.8 million worth of shares. AQR Capital Management, Balyasny Asset Management, and Glendon Capital Management 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 One68 Global Capital allocated the biggest weight to Dana Incorporated (NYSE:DAN), around 2.67% of its 13F portfolio. Elm Ridge Capital is also relatively very bullish on the stock, designating 2.4 percent of its 13F equity portfolio to DAN.
Seeing as Dana Incorporated (NYSE:DAN) has experienced falling interest from the aggregate hedge fund industry, we can see that there lies a certain "tier" of funds who sold off their positions entirely in the third quarter. Intriguingly, Gregg Moskowitz's Interval Partners said goodbye to the largest position of the 750 funds tracked by Insider Monkey, worth an estimated $1.5 million in stock, and John W. Moon's Moon Capital was right behind this move, as the fund said goodbye to about $1.3 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 3 funds in the third quarter.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Dana Incorporated (NYSE:DAN) but similarly valued. We will take a look at Empire State Realty Trust Inc (NYSE:ESRT), Herman Miller, Inc. (NASDAQ:MLHR), Commscope Holding Company Inc (NASDAQ:COMM), CNX Resources Corporation (NYSE:CNX), Macy's, Inc. (NYSE:M), Federal Signal Corporation (NYSE:FSS), and JinkoSolar Holding Co., Ltd. (NYSE:JKS). This group of stocks' market caps are closest to DAN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ESRT,17,161290,-2 MLHR,23,121547,1 COMM,30,482875,-2 CNX,33,581481,5 M,28,363563,-8 FSS,16,47491,4 JKS,10,42744,2 Average,22.4,257284,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.4 hedge funds with bullish positions and the average amount invested in these stocks was $257 million. That figure was $163 million in DAN's case. CNX Resources Corporation (NYSE:CNX) is the most popular stock in this table. On the other hand JinkoSolar Holding Co., Ltd. (NYSE:JKS) is the least popular one with only 10 bullish hedge fund positions. Dana Incorporated (NYSE:DAN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for DAN is 51.7. 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 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on DAN as the stock returned 54.6% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.