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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 second 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 6 years and analyze what the smart money thinks of Dover Corporation (NYSE:DOV) based on that data.
Is DOV a good stock to buy? Dover Corporation (NYSE:DOV) has experienced an increase in activity from the world's largest hedge funds lately. Dover Corporation (NYSE:DOV) was in 29 hedge funds' portfolios at the end of the second quarter of 2021. The all time high for this statistic is 40. There were 26 hedge funds in our database with DOV positions at the end of the first quarter. Our calculations also showed that DOV isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Ray Dalio of Bridgewater Associates
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 we're going to view the recent hedge fund action surrounding Dover Corporation (NYSE:DOV).
Do Hedge Funds Think DOV Is A Good Stock To Buy Now?
At Q2's end, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a change of 12% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in DOV over the last 24 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Citadel Investment Group, managed by Ken Griffin, holds the biggest position in Dover Corporation (NYSE:DOV). Citadel Investment Group has a $166.3 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is East Side Capital (RR Partners), led by Steven Richman, holding a $118.5 million position; 12.8% of its 13F portfolio is allocated to the stock. Other peers that are bullish contain Phill Gross and Robert Atchinson's Adage Capital Management, Cliff Asness's AQR Capital Management and Israel Englander's Millennium Management. In terms of the portfolio weights assigned to each position East Side Capital (RR Partners) allocated the biggest weight to Dover Corporation (NYSE:DOV), around 12.76% of its 13F portfolio. Albar Capital is also relatively very bullish on the stock, dishing out 5.78 percent of its 13F equity portfolio to DOV.
With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the most outsized position in Dover Corporation (NYSE:DOV). Arrowstreet Capital had $27.3 million invested in the company at the end of the quarter. Alexander Mitchell's Scopus Asset Management also initiated a $15.1 million position during the quarter. The following funds were also among the new DOV investors: Javier Velazquez's Albar Capital, Renaissance Technologies, and Ray Dalio's Bridgewater Associates.
Let's now take a look at hedge fund activity in other stocks similar to Dover Corporation (NYSE:DOV). These stocks are Caesars Entertainment Inc. (NASDAQ:CZR), Xylem Inc (NYSE:XYL), Fox Corporation (NASDAQ:FOXA), PPL Corporation (NYSE:PPL), 10x Genomics, Inc. (NASDAQ:TXG), Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK), and Tractor Supply Company (NASDAQ:TSCO). This group of stocks' market valuations match DOV's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CZR,73,1839888,-3 XYL,23,931677,0 FOXA,35,441270,-3 PPL,23,417630,-2 TXG,28,1447446,5 TLK,5,108737,1 TSCO,38,1374315,9 Average,32.1,937280,1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.1 hedge funds with bullish positions and the average amount invested in these stocks was $937 million. That figure was $700 million in DOV's case. Caesars Entertainment Inc. (NASDAQ:CZR) is the most popular stock in this table. On the other hand Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK) is the least popular one with only 5 bullish hedge fund positions. Dover Corporation (NYSE:DOV) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for DOV is 47.4. 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. 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 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. A small number of hedge funds were also right about betting on DOV as the stock returned 9.9% since the end of the second quarter (through 10/15) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.