How do we determine whether Knoll Inc (NYSE:KNL) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
Knoll Inc (NYSE:KNL) investors should be aware of a decrease in hedge fund sentiment recently. KNL was in 10 hedge funds’ portfolios at the end of September. There were 12 hedge funds in our database with KNL holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Merit Medical Systems, Inc. (NASDAQ:MMSI), Universal Insurance Holdings, Inc. (NYSE:UVE), and Interval Leisure Group, Inc. (NASDAQ:IILG) to gather more data points.
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In today’s marketplace there are tons of formulas stock market investors employ to appraise their holdings. Some of the most underrated formulas are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the top picks of the top investment managers can outperform their index-focused peers by a very impressive amount (see the details here).
Now, let’s take a look at the key action regarding Knoll Inc (NYSE:KNL).
How are hedge funds trading Knoll Inc (NYSE:KNL)?
At Q3’s end, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a drop of 17% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Columbus Circle Investors, managed by Clifford Fox, holds the biggest position in Knoll Inc (NYSE:KNL). The fund has a $7.8 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is D E Shaw, managed by D. E. Shaw, which holds a $3.7 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Remaining professional money managers that hold long positions comprise Richard Driehaus’s Driehaus Capital, John Overdeck and David Siegel’s Two Sigma Advisors and Jim Simons’s Renaissance Technologies.
Because Knoll Inc (NYSE:KNL) has faced declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there is a sect of fund managers that slashed their positions entirely last quarter. Interestingly, Ken Griffin’s Citadel Investment Group said goodbye to the largest stake of the 700 funds followed by Insider Monkey, comprising an estimated $3.2 million in stock, and Paul Tudor Jones’s Tudor Investment Corp was right behind this move, as the fund sold off about $0.8 million worth of KNL shares. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 2 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Knoll Inc (NYSE:KNL) but similarly valued. We will take a look at Merit Medical Systems, Inc. (NASDAQ:MMSI), Universal Insurance Holdings, Inc. (NYSE:UVE), Interval Leisure Group, Inc. (NASDAQ:IILG), and California Water Service Group (NYSE:CWT). This group of stocks’ market caps resemble KNL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MMSI | 18 | 93648 | 0 |
| UVE | 18 | 59616 | -1 |
| IILG | 14 | 70296 | -3 |
| CWT | 10 | 66200 | -5 |
As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $72 million. That figure was just $19 million in KNL’s case. Merit Medical Systems, Inc. (NASDAQ:MMSI) is the most popular stock in this table. On the other hand California Water Service Group (NYSE:CWT) is the least popular one with only 10 bullish hedge fund positions, on par with Knoll Inc (NYSE:KNL). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
