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Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of DAVIDsTEA Inc. (NASDAQ:DTEA).
Is DAVIDsTEA Inc. (DTEA) a good stock to buy? The best stock pickers were becoming hopeful. The number of bullish hedge fund positions improved by 1 in recent months. DAVIDsTEA Inc. (NASDAQ:DTEA) was in 3 hedge funds' portfolios at the end of March. The all time high for this statistic is 5. Our calculations also showed that DTEA isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Today there are a lot of methods shareholders put to use to appraise publicly traded companies. A couple of the most under-the-radar methods are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the best picks of the top money managers can outpace the broader indices by a significant amount (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Ryan Tolkin, CIO of Schonfeld Strategic Advisors
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Do Hedge Funds Think DTEA Is A Good Stock To Buy Now?
At first quarter's end, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 50% from the fourth quarter of 2020. By comparison, 2 hedge funds held shares or bullish call options in DTEA a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Ken Griffin's Citadel Investment Group has the biggest position in DAVIDsTEA Inc. (NASDAQ:DTEA), worth close to $0.3 million, comprising less than 0.1%% of its total 13F portfolio. The second largest stake is held by Ken Griffin of Citadel Investment Group, with a $0.1 million call position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that hold long positions encompass Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors, John Overdeck and David Siegel's Two Sigma Advisors and . In terms of the portfolio weights assigned to each position Schonfeld Strategic Advisors allocated the biggest weight to DAVIDsTEA Inc. (NASDAQ:DTEA), around 0.0008% of its 13F portfolio. Two Sigma Advisors is also relatively very bullish on the stock, earmarking 0.0002 percent of its 13F equity portfolio to DTEA.
As aggregate interest increased, key hedge funds were breaking ground themselves. Two Sigma Advisors, managed by John Overdeck and David Siegel, created the biggest position in DAVIDsTEA Inc. (NASDAQ:DTEA). Two Sigma Advisors had $0.1 million invested in the company at the end of the quarter.
Let's also examine hedge fund activity in other stocks similar to DAVIDsTEA Inc. (NASDAQ:DTEA). We will take a look at Summit State Bank (NASDAQ:SSBI), Cocrystal Pharma, Inc. (NASDAQ:COCP), Natural Alternatives International, Inc. (NASDAQ:NAII), Riverview Financial Corporation (NASDAQ:RIVE), F-star Therapeutics, Inc. (NASDAQ:FSTX), Reed's, Inc. (NASDAQ:REED), and TransAct Technologies Incorporated (NASDAQ:TACT). This group of stocks' market values are closest to DTEA's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SSBI,1,202,0 COCP,1,5914,-2 NAII,2,7546,1 RIVE,6,8206,1 FSTX,4,2809,1 REED,4,6108,0 TACT,7,17078,0 Average,3.6,6838,0.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.6 hedge funds with bullish positions and the average amount invested in these stocks was $7 million. That figure was $0 million in DTEA's case. TransAct Technologies Incorporated (NASDAQ:TACT) is the most popular stock in this table. On the other hand Summit State Bank (NASDAQ:SSBI) is the least popular one with only 1 bullish hedge fund positions. DAVIDsTEA Inc. (NASDAQ:DTEA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for DTEA is 40.7. 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 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 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. A small number of hedge funds were also right about betting on DTEA as the stock returned 36.7% since the end of the first quarter (through 6/11) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.