Is Kearny Financial Corp. (NASDAQ:KRNY) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Kearny Financial Corp. (NASDAQ:KRNY) was in 16 hedge funds’ portfolios at the end of the third quarter of 2019. KRNY shareholders have witnessed an increase in hedge fund interest of late. There were 13 hedge funds in our database with KRNY positions at the end of the previous quarter. Our calculations also showed that KRNY isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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 flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Phill Gross of Adage Capital Management
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a look at the new hedge fund action regarding Kearny Financial Corp. (NASDAQ:KRNY).
How are hedge funds trading Kearny Financial Corp. (NASDAQ:KRNY)?
At Q3’s end, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of 23% from one quarter earlier. On the other hand, there were a total of 17 hedge funds with a bullish position in KRNY a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Renaissance Technologies has the number one position in Kearny Financial Corp. (NASDAQ:KRNY), worth close to $84.2 million, amounting to 0.1% of its total 13F portfolio. The second most bullish fund manager is Driehaus Capital, managed by Richard Driehaus, which holds a $7.7 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism encompass Frederick DiSanto’s Ancora Advisors, John D. Gillespie’s Prospector Partners and Tim Mullen’s Swift Run Capital Management. In terms of the portfolio weights assigned to each position Swift Run Capital Management allocated the biggest weight to Kearny Financial Corp. (NASDAQ:KRNY), around 6.08% of its 13F portfolio. Prospector Partners is also relatively very bullish on the stock, earmarking 1.05 percent of its 13F equity portfolio to KRNY.
As aggregate interest increased, key hedge funds have been driving this bullishness. Winton Capital Management, managed by David Harding, established the biggest position in Kearny Financial Corp. (NASDAQ:KRNY). Winton Capital Management had $2.2 million invested in the company at the end of the quarter. Phill Gross and Robert Atchinson’s Adage Capital Management also made a $1.1 million investment in the stock during the quarter.
Let’s check out hedge fund activity in other stocks similar to Kearny Financial Corp. (NASDAQ:KRNY). We will take a look at Encore Wire Corporation (NASDAQ:WIRE), Tronox Holdings plc (NYSE:TROX), Milacron Holdings Corp (NYSE:MCRN), and Turning Point Therapeutics, Inc. (NASDAQ:TPTX). This group of stocks’ market values match KRNY’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WIRE | 16 | 45331 | 1 |
| TROX | 18 | 115194 | -2 |
| MCRN | 18 | 195679 | 5 |
| TPTX | 19 | 360630 | 4 |
| Average | 17.75 | 179209 | 2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.75 hedge funds with bullish positions and the average amount invested in these stocks was $179 million. That figure was $133 million in KRNY’s case. Turning Point Therapeutics, Inc. (NASDAQ:TPTX) is the most popular stock in this table. On the other hand Encore Wire Corporation (NASDAQ:WIRE) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Kearny Financial Corp. (NASDAQ:KRNY) is even less popular than WIRE. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on KRNY, though not to the same extent, as the stock returned 8.1% during the fourth quarter (through 11/30) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
