With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter. One of these stocks was Kilroy Realty Corp (NYSE:KRC).
Is Kilroy Realty Corp (NYSE:KRC) going to take off soon? Hedge funds are betting on the stock. The number of bullish hedge fund bets moved up by 5 recently. Our calculations also showed that KRC isn’t among the 30 most popular stocks among hedge funds (see the video below). KRC was in 16 hedge funds’ portfolios at the end of the second quarter of 2019. There were 11 hedge funds in our database with KRC holdings at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 25.7% through September 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Unlike this former hedge fund manager who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s take a look at the fresh hedge fund action surrounding Kilroy Realty Corp (NYSE:KRC).
Hedge fund activity in Kilroy Realty Corp (NYSE:KRC)
At the end of the second quarter, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 45% from the first quarter of 2019. The graph below displays the number of hedge funds with bullish position in KRC over the last 16 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Kilroy Realty Corp (NYSE:KRC) was held by Citadel Investment Group, which reported holding $53.3 million worth of stock at the end of March. It was followed by Zimmer Partners with a $50 million position. Other investors bullish on the company included Renaissance Technologies, Millennium Management, and Adage Capital Management.
With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. Balyasny Asset Management, managed by Dmitry Balyasny, initiated the most outsized position in Kilroy Realty Corp (NYSE:KRC). Balyasny Asset Management had $6.3 million invested in the company at the end of the quarter. Anand Parekh’s Alyeska Investment Group also made a $5.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital, Daniel Johnson’s Gillson Capital, and D. E. Shaw’s D E Shaw.
Let’s check out hedge fund activity in other stocks similar to Kilroy Realty Corp (NYSE:KRC). These stocks are The Middleby Corporation (NASDAQ:MIDD), Momo Inc (NASDAQ:MOMO), BeiGene, Ltd. (NASDAQ:BGNE), and Pool Corporation (NASDAQ:POOL). This group of stocks’ market values are similar to KRC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MIDD | 27 | 554379 | 7 |
| MOMO | 22 | 855304 | 1 |
| BGNE | 12 | 1643941 | -3 |
| POOL | 22 | 342084 | 6 |
| Average | 20.75 | 848927 | 2.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.75 hedge funds with bullish positions and the average amount invested in these stocks was $849 million. That figure was $162 million in KRC’s case. The Middleby Corporation (NASDAQ:MIDD) is the most popular stock in this table. On the other hand BeiGene, Ltd. (NASDAQ:BGNE) is the least popular one with only 12 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 calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on KRC as the stock returned 6.2% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
