We are still in an overall bull market and many stocks that smart money investors were piling into surged through October 17th. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 45% and 39% respectively. Hedge funds’ top 3 stock picks returned 34.4% this year and beat the S&P 500 ETFs by 13 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Kontoor Brands, Inc. (NYSE:KTB).
Kontoor Brands, Inc. (NYSE:KTB) has experienced an increase in activity from the world’s largest hedge funds in recent months. Our calculations also showed that KTB isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most market participants, hedge funds are perceived as slow, outdated investment tools of years past. While there are greater than 8000 funds trading today, Our experts look at the aristocrats of this group, approximately 750 funds. These investment experts control most of all hedge funds’ total capital, and by monitoring their matchless investments, Insider Monkey has discovered several investment strategies that have historically surpassed the S&P 500 index. Insider Monkey’s flagship hedge fund strategy exceeded the S&P 500 index by around 5 percentage points per annum since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike former hedge manager, Dr. Steve Sjuggerud, 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. We’re going to take a look at the fresh hedge fund action surrounding Kontoor Brands, Inc. (NYSE:KTB).
How are hedge funds trading Kontoor Brands, Inc. (NYSE:KTB)?
At the end of the second quarter, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13 from one quarter earlier. On the other hand, there were a total of 0 hedge funds with a bullish position in KTB 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.
Among these funds, Samlyn Capital held the most valuable stake in Kontoor Brands, Inc. (NYSE:KTB), which was worth $36.7 million at the end of the second quarter. On the second spot was Holocene Advisors which amassed $30.1 million worth of shares. Moreover, Arrowstreet Capital, ExodusPoint Capital, and Millennium Management were also bullish on Kontoor Brands, Inc. (NYSE:KTB), allocating a large percentage of their portfolios to this stock.
As aggregate interest increased, key money managers were leading the bulls’ herd. Samlyn Capital, managed by Robert Pohly, assembled the biggest position in Kontoor Brands, Inc. (NYSE:KTB). Samlyn Capital had $36.7 million invested in the company at the end of the quarter. Brandon Haley’s Holocene Advisors also made a $30.1 million investment in the stock during the quarter. The following funds were also among the new KTB investors: Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Michael Gelband’s ExodusPoint Capital, and Israel Englander’s Millennium Management.
Let’s check out hedge fund activity in other stocks similar to Kontoor Brands, Inc. (NYSE:KTB). We will take a look at WestAmerica Bancorporation (NASDAQ:WABC), Knowles Corporation (NYSE:KN), Mueller Industries, Inc. (NYSE:MLI), and National Storage Affiliates Trust (NYSE:NSA). This group of stocks’ market values match KTB’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WABC | 10 | 19455 | 4 |
| KN | 22 | 264759 | 5 |
| MLI | 15 | 195723 | 2 |
| NSA | 18 | 131987 | 2 |
| Average | 16.25 | 152981 | 3.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.25 hedge funds with bullish positions and the average amount invested in these stocks was $153 million. That figure was $107 million in KTB’s case. Knowles Corporation (NYSE:KN) is the most popular stock in this table. On the other hand WestAmerica Bancorporation (NASDAQ:WABC) is the least popular one with only 10 bullish hedge fund positions. Kontoor Brands, Inc. (NYSE:KTB) 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 KTB as the stock returned 27.2% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.