Published on 19 Jun 2021 on Insider Monkey via Yahoo Finance
DIRTT Environmental Solutions Ltd. (DRTT) Fell Out Of Favor With Hedge Funds
Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds' 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about DIRTT Environmental Solutions Ltd. (NASDAQ:DRTT) in this article.
Is DIRTT Environmental Solutions Ltd. (NASDAQ:DRTT) going to take off soon? The best stock pickers were in a bearish mood. The number of bullish hedge fund bets dropped by 1 in recent months. DIRTT Environmental Solutions Ltd. (NASDAQ:DRTT) was in 4 hedge funds' portfolios at the end of March. The all time high for this statistic is 12. Our calculations also showed that DRTT isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 5 hedge funds in our database with DRTT positions at the end of the fourth quarter.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.