At Insider Monkey, we pore over the filings of nearly 873 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we've gathered as a result gives us access to a wealth of collective knowledge based on these firms' portfolio holdings as of June 30th. In this article, we will use that wealth of knowledge to determine whether or not 3D Systems Corporation (NYSE:DDD) makes for a good investment right now.
3D Systems Corporation (NYSE:DDD) investors should be aware of an increase in hedge fund sentiment in recent months. 3D Systems Corporation (NYSE:DDD) was in 20 hedge funds' portfolios at the end of June. The all time high for this statistic was previously 19. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 16 hedge funds in our database with DDD positions at the end of the first quarter. Our calculations also showed that DDD isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Philippe Laffont of Coatue Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, plant based food market is expected to explode 100-fold by 2050, so we are checking out this under-the-radar stock. We go through lists like the 10 best growth stocks to buy 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. Now we're going to take a glance at the recent hedge fund action regarding 3D Systems Corporation (NYSE:DDD).
Do Hedge Funds Think DDD Is A Good Stock To Buy Now?
At the end of June, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards DDD over the last 24 quarters. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
Among these funds, D E Shaw held the most valuable stake in 3D Systems Corporation (NYSE:DDD), which was worth $172.8 million at the end of the second quarter. On the second spot was ARK Investment Management which amassed $159.2 million worth of shares. Renaissance Technologies, Coatue Management, and Citadel Investment Group 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 Brevan Howard allocated the biggest weight to 3D Systems Corporation (NYSE:DDD), around 0.44% of its 13F portfolio. GMT Capital is also relatively very bullish on the stock, setting aside 0.44 percent of its 13F equity portfolio to DDD.
As one would reasonably expect, specific money managers have jumped into 3D Systems Corporation (NYSE:DDD) headfirst. Two Sigma Advisors, managed by John Overdeck and David Siegel, established the most valuable position in 3D Systems Corporation (NYSE:DDD). Two Sigma Advisors had $7.4 million invested in the company at the end of the quarter. Thomas E. Claugus's GMT Capital also initiated a $5.9 million position during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace's Marshall Wace LLP, Joel Greenblatt's Gotham Asset Management, and Matthew Hulsizer's PEAK6 Capital Management.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as 3D Systems Corporation (NYSE:DDD) but similarly valued. These stocks are Rayonier Inc. (NYSE:RYN), Nomad Foods Limited (NYSE:NOMD), Stantec Inc. (NYSE:STN), Power Integrations Inc (NASDAQ:POWI), Revolve Group, Inc. (NYSE:RVLV), Spirit AeroSystems Holdings, Inc. (NYSE:SPR), and Red Rock Resorts, Inc. (NASDAQ:RRR). All of these stocks' market caps are closest to DDD's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RYN,13,392663,-5 NOMD,26,298284,1 STN,10,46456,1 POWI,21,138778,3 RVLV,22,211498,-7 SPR,35,853789,-9 RRR,26,658230,-2 Average,21.9,371385,-2.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.9 hedge funds with bullish positions and the average amount invested in these stocks was $371 million. That figure was $511 million in DDD's case. Spirit AeroSystems Holdings, Inc. (NYSE:SPR) is the most popular stock in this table. On the other hand Stantec Inc. (NYSE:STN) is the least popular one with only 10 bullish hedge fund positions. 3D Systems Corporation (NYSE:DDD) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for DDD is 59. 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. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. 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% in 2021 through October 22nd and surpassed the market again by 1.6 percentage points. Unfortunately DDD wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); DDD investors were disappointed as the stock returned -33% since the end of June (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.