Dollar General Corp. (NYSE:DG) has experienced an increase in hedge fund sentiment recently. Richard Barrera, activists Scott Ferguson and Barry Rosenstein recently initiated brand new positions in the stock. Should you pay attention to hedge fund moves though?
If you’d ask most traders, hedge funds are perceived as underperforming, old financial tools of years past. While there are more than 8000 funds in operation at the moment, experts at Insider Monkey, a website specializing in hedge funds, hone in on the upper echelon of this group, around 700 funds. By tracking their stock picks, Insider Monkey has brought to light many investment strategies that have historically surpassed the market. For instance, Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually for a decade in their back tests. So, it may make sense to take a look at hedge fund moves. In this article we will analyze the latest action regarding Dollar General Corp. (NYSE:DG).
How have hedgies been trading Dollar General Corp. (NYSE:DG)?
Heading into Q4, a total of 86 of the hedge funds tracked by Insider Monkey were bullish in this stock, a change of 16% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their holdings substantially.
When looking at the hedgies followed by Insider Monkey, Eric W. Mandelblatt’s Soroban Capital Partners had the biggest position in Dollar General Corp. (NYSE:DG), worth close to $636 million, comprising 4.8% of its total 13F portfolio. The second most bullish hedge fund manager is Stephen Mandel of Lone Pine Capital, with a $568.7 million position; 2.2% of its 13F portfolio is allocated to the stock. Other hedgies that are bullish comprise Eric W. Mandelblatt’s Soroban Capital Partners, Barry Rosenstein’s JANA Partners and Larry Robbins’s Glenview Capital.
With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. JANA Partners, managed by Barry Rosenstein, established the most outsized position in Dollar General Corp. (NYSE:DG). JANA Partners had 492.4 million invested in the company at the end of the quarter. James Dinan’s York Capital Management also initiated a $238.5 million position during the quarter. The other funds with new positions in the stock are John Burbank’s Passport Capital, Scott Ferguson’s Sachem Head Capital, and Richard Barrera’s Roystone Capital Partners.
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