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Did Hedge Funds Drop The Ball On Delphi Technologies PLC (DLPH) ?

Abigail Fisher

Insider Monkey finished processing more than 700 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of December 31st, 2018. In this article we are going to take a look at smart money sentiment towards Delphi Technologies PLC (NYSE:DLPH).

Delphi Technologies PLC (NYSE:DLPH) was in 18 hedge funds' portfolios at the end of the fourth quarter of 2018. DLPH has experienced a decrease in support from the world's most elite money managers in recent months. There were 22 hedge funds in our database with DLPH holdings at the end of the previous quarter. Our calculations also showed that DLPH isn't among the 30 most popular stocks among hedge funds.

According to most shareholders, hedge funds are perceived as underperforming, old financial vehicles of years past. While there are over 8000 funds trading today, Our experts choose to focus on the aristocrats of this group, around 750 funds. These hedge fund managers administer most of the smart money's total capital, and by following their unrivaled investments, Insider Monkey has revealed a few investment strategies that have historically surpassed the market. Insider Monkey's flagship hedge fund strategy defeated the S&P 500 index by nearly 5 percentage points a year since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 27.5% since February 2017 (through March 12th) even though the market was up nearly 25% during the same period. We just shared a list of 6 short targets in our latest quarterly update and they are already down an average of 6% in less than a month.

GLENVIEW CAPITAL

We're going to view the recent hedge fund action surrounding Delphi Technologies PLC (NYSE:DLPH).

How are hedge funds trading Delphi Technologies PLC (NYSE:DLPH)?

At the end of the fourth quarter, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of -18% from one quarter earlier. On the other hand, there were a total of 18 hedge funds with a bullish position in DLPH a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

DLPH_apr2019

According to Insider Monkey's hedge fund database, Ken Griffin's Citadel Investment Group has the most valuable position in Delphi Technologies PLC (NYSE:DLPH), worth close to $45.5 million, amounting to less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Larry Robbins of Glenview Capital, with a $39.8 million position; 0.4% of its 13F portfolio is allocated to the company. Some other members of the smart money with similar optimism comprise D. E. Shaw's D E Shaw, Israel Englander's Millennium Management and Ian Simm's Impax Asset Management.

Since Delphi Technologies PLC (NYSE:DLPH) has experienced bearish sentiment from the smart money, we can see that there lies a certain "tier" of hedgies that elected to cut their full holdings by the end of the third quarter. Intriguingly, Dmitry Balyasny's Balyasny Asset Management said goodbye to the largest position of all the hedgies tracked by Insider Monkey, worth about $19.7 million in call options. Alexander Mitchell's fund, Scopus Asset Management, also said goodbye to its call options, about $6.3 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 4 funds by the end of the third quarter.

Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Delphi Technologies PLC (NYSE:DLPH) but similarly valued. These stocks are Cambrex Corporation (NYSE:CBM), Contura Energy, Inc. (NYSE:CTRA), Shutterstock Inc (NYSE:SSTK), and NOW Inc (NYSE:DNOW). This group of stocks' market values resemble DLPH's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CBM,13,33792,-4 CTRA,28,528652,28 SSTK,16,73740,1 DNOW,14,79658,3 Average,17.75,178961,7 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.75 hedge funds with bullish positions and the average amount invested in these stocks was $179 million. That figure was $171 million in DLPH's case. Contura Energy, Inc. (NYSE:CTRA) is the most popular stock in this table. On the other hand Cambrex Corporation (NYSE:CBM) is the least popular one with only 13 bullish hedge fund positions. Delphi Technologies PLC (NYSE:DLPH) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Hedge funds were also right about betting on DLPH as the stock returned 78.5% and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.

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

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