Do Hedge Funds and Insiders Love Kohl’s Corporation (KSS)?

Kohl’s Corporation (NYSE:KSS) was in 23 hedge funds’ portfolio at the end of the first quarter of 2013. KSS has seen a decrease in hedge fund interest recently. There were 36 hedge funds in our database with KSS positions at the end of the previous quarter.

In the 21st century investor’s toolkit, there are a multitude of metrics shareholders can use to monitor their holdings. A duo of the most useful are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top hedge fund managers can trounce the broader indices by a healthy amount (see just how much).

Equally as important, bullish insider trading activity is a second way to break down the world of equities. As the old adage goes: there are lots of stimuli for an insider to downsize shares of his or her company, but just one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the market-beating potential of this tactic if investors understand what to do (learn more here).

Consequently, it’s important to take a peek at the recent action encompassing Kohl’s Corporation (NYSE:KSS).

How have hedgies been trading Kohl’s Corporation (NYSE:KSS)?

At Q1’s end, a total of 23 of the hedge funds we track held long positions in this stock, a change of -36% from one quarter earlier. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes significantly.

When looking at the hedgies we track, Anthony Bozza’s Lakewood Capital Management had the most valuable position in Kohl’s Corporation (NYSE:KSS), worth close to $36.3 million, accounting for 2.4% of its total 13F portfolio. Sitting at the No. 2 spot is Pzena Investment Management, managed by Richard S. Pzena, which held a $30.1 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other peers that are bullish include Ron Gutfleish’s Elm Ridge Capital, Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital and Cliff Asness’s AQR Capital Management.

Judging by the fact that Kohl’s Corporation (NYSE:KSS) has faced declining sentiment from the entirety of the hedge funds we track, we can see that there was a specific group of funds that elected to cut their full holdings at the end of the first quarter. At the top of the heap, Steven Cohen’s SAC Capital Advisors said goodbye to the biggest investment of all the hedgies we track, worth an estimated $25.8 million in call options. Michael Platt and William Reeves’s fund, BlueCrest Capital Mgmt., also cut its call options., about $12.9 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 13 funds at the end of the first quarter.

What do corporate executives and insiders think about Kohl’s Corporation (NYSE:KSS)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company in question has experienced transactions within the past six months. Over the latest 180-day time frame, Kohl’s Corporation (NYSE:KSS) has experienced 1 unique insiders purchasing, and 3 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Kohl’s Corporation (NYSE:KSS). These stocks are The TJX Companies, Inc. (NYSE:TJX), J.C. Penney Company, Inc. (NYSE:JCP), Dillard’s, Inc. (NYSE:DDS), Sears Holdings Corporation (NASDAQ:SHLD), and Macy’s, Inc. (NYSE:M). This group of stocks are the members of the department stores industry and their market caps resemble KSS’s market cap.