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 Kilroy Realty Corp (NYSE:KRC) in this article.
Kilroy Realty Corp (NYSE:KRC) was in 27 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 26. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. KRC investors should be aware of an increase in hedge fund sentiment of late. There were 25 hedge funds in our database with KRC holdings at the end of December. Our calculations also showed that KRC isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In today’s marketplace there are tons of gauges market participants have at their disposal to appraise their holdings. Two of the less utilized gauges are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the best investment managers can trounce their index-focused peers by a very impressive amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Howard Marks of Oaktree Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery stocks 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. Keeping this in mind we’re going to go over the new hedge fund action regarding Kilroy Realty Corp (NYSE:KRC).
Do Hedge Funds Think KRC Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of 8% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards KRC over the last 23 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Zimmer Partners was the largest shareholder of Kilroy Realty Corp (NYSE:KRC), with a stake worth $128 million reported as of the end of March. Trailing Zimmer Partners was Oaktree Capital Management, which amassed a stake valued at $59.7 million. Waterfront Capital Partners, AQR Capital 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 Masterton Capital Management allocated the biggest weight to Kilroy Realty Corp (NYSE:KRC), around 5.75% of its 13F portfolio. V3 Capital is also relatively very bullish on the stock, setting aside 3.11 percent of its 13F equity portfolio to KRC.
With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Oaktree Capital Management, managed by Howard Marks, assembled the biggest position in Kilroy Realty Corp (NYSE:KRC). Oaktree Capital Management had $59.7 million invested in the company at the end of the quarter. Phill Gross and Robert Atchinson’s Adage Capital Management also made a $7.1 million investment in the stock during the quarter. The other funds with brand new KRC positions are Clint Carlson’s Carlson Capital, Matthew Hulsizer’s PEAK6 Capital Management, and Minhua Zhang’s Weld Capital Management.
Let’s now take a look at hedge fund activity in other stocks similar to Kilroy Realty Corp (NYSE:KRC). These stocks are Ultragenyx Pharmaceutical Inc (NASDAQ:RARE), People’s United Financial, Inc. (NASDAQ:PBCT), Woodward Inc (NASDAQ:WWD), Smartsheet Inc. (NYSE:SMAR), SiteOne Landscape Supply, Inc. (NYSE:SITE), CubeSmart (NYSE:CUBE), and Jefferies Financial Group Inc. (NYSE:JEF). This group of stocks’ market caps resemble KRC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RARE | 25 | 588066 | -1 |
| PBCT | 20 | 208579 | -9 |
| WWD | 27 | 643051 | 8 |
| SMAR | 39 | 1490070 | -6 |
| SITE | 16 | 67390 | -1 |
| CUBE | 25 | 350765 | 1 |
| JEF | 38 | 700629 | 5 |
| Average | 27.1 | 578364 | -0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.1 hedge funds with bullish positions and the average amount invested in these stocks was $578 million. That figure was $329 million in KRC’s case. Smartsheet Inc. (NYSE:SMAR) is the most popular stock in this table. On the other hand SiteOne Landscape Supply, Inc. (NYSE:SITE) is the least popular one with only 16 bullish hedge fund positions. Kilroy Realty Corp (NYSE:KRC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for KRC is 60.9. 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 July 9th and surpassed the market again by 6.7 percentage points. Unfortunately KRC wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); KRC investors were disappointed as the stock returned 8.6% since the end of March (through 7/9) 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.
