Hedge Funds Are Piling Into Korn Ferry (KFY)

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Korn Ferry (NYSE:KFY), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Korn Ferry (NYSE:KFY) has experienced an increase in hedge fund interest of late. Korn Ferry (NYSE:KFY) was in 25 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 28. Our calculations also showed that KFY isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. Keeping this in mind let’s take a look at the latest hedge fund action surrounding Korn Ferry (NYSE:KFY).

Sahm Adrangi of Kerrisdale Capital

Do Hedge Funds Think KFY Is A Good Stock To Buy Now?

At the end of September, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of 19% from the previous quarter. The graph below displays the number of hedge funds with bullish position in KFY over the last 25 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Paradice Investment Management was the largest shareholder of Korn Ferry (NYSE:KFY), with a stake worth $77.4 million reported as of the end of September. Trailing Paradice Investment Management was Ariel Investments, which amassed a stake valued at $57.8 million. Royce & Associates, Kerrisdale Capital, and Millennium Management 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 Paradice Investment Management allocated the biggest weight to Korn Ferry (NYSE:KFY), around 3.5% of its 13F portfolio. Kerrisdale Capital is also relatively very bullish on the stock, designating 3.46 percent of its 13F equity portfolio to KFY.

Consequently, key hedge funds were leading the bulls’ herd. Intrinsic Edge Capital, managed by Mark Coe, assembled the most valuable position in Korn Ferry (NYSE:KFY). Intrinsic Edge Capital had $7.2 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $0.8 million position during the quarter. The following funds were also among the new KFY investors: Peter Algert’s Algert Global, Joel Greenblatt’s Gotham Asset Management, and Hoon Kim’s Quantinno Capital.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Korn Ferry (NYSE:KFY) but similarly valued. We will take a look at Broadstone Net Lease, Inc. (NYSE:BNL), 1Life Healthcare, Inc. (NASDAQ:ONEM), VIZIO Holding Corp. (NYSE:VZIO), Ollie’s Bargain Outlet Holdings Inc (NASDAQ:OLLI), Pacific Premier Bancorp, Inc. (NASDAQ:PPBI), SunPower Corporation (NASDAQ:SPWR), and VTEX (NYSE:VTEX). This group of stocks’ market values resemble KFY’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.3 hedge funds with bullish positions and the average amount invested in these stocks was $239 million. That figure was $301 million in KFY’s case. 1Life Healthcare, Inc. (NASDAQ:ONEM) is the most popular stock in this table. On the other hand Broadstone Net Lease, Inc. (NYSE:BNL) is the least popular one with only 7 bullish hedge fund positions. Korn Ferry (NYSE:KFY) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for KFY is 69.1. 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 positive signal but 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 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately KFY wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on KFY were disappointed as the stock returned 5.3% since the end of September (through 12/9) 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 many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.