While the market driven by short-term sentiment influenced by uncertainty regarding the future of the interest rate environment in the US, the low commodity prices and the economic turmoil in China, many smart money investors are keeping their optimism regarding the current bull run, while still hedging many of their long positions. However, as we know, big investors usually buy stocks with strong fundamentals, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Kimball Electronics Inc (NASDAQ:KE).
Kimball Electronics Inc (NASDAQ:KE) was in 10 hedge funds’ portfolios at the end of September. KE investors should be aware of an increase in hedge fund interest recently. There were 9 hedge funds in our database with KE 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 Ocular Therapeutix Inc (NASDAQ:OCUL), NeoGenomics, Inc. (NASDAQ:NEO), and Perry Ellis International, Inc. (NASDAQ:PERY) to gather more data points.
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Today there are numerous gauges market participants put to use to size up publicly traded companies. A pair of the most under-the-radar gauges is composed of hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the top picks of the top hedge fund managers can beat the S&P 500 by a superb amount (see the details here).
With all of this in mind, we’re going to view the key action encompassing Kimball Electronics Inc (NASDAQ:KE).
What does the smart money think about Kimball Electronics Inc (NASDAQ:KE)?
At Q3’s end, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Chuck Royce’s Royce & Associates has the most valuable position in Kimball Electronics Inc (NASDAQ:KE), worth close to $9 million, accounting for less than 0.1%% of its total 13F portfolio. On Royce & Associates’s heels is Jeffrey Jacobowitz of Simcoe Capital Management, with an $5.6 million position; 3.7% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors with similar optimism include Jim Simons’s Renaissance Technologies, and Thomas E. Lynch’s Mill Road Capital Management.
As industrywide interest jumped, specific money managers have jumped into Kimball Electronics Inc (NASDAQ:KE) headfirst. Hawk Ridge Management, managed by David Brown, established a position in Kimball Electronics Inc (NASDAQ:KE). Hawk Ridge Management had $3.1 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made an $0.2 million investment in the stock during the quarter. The only other fund with a brand new KE position is D. E. Shaw’s D E Shaw.
Let’s now take a look at hedge fund activity in other stocks similar to Kimball Electronics Inc (NASDAQ:KE). We will take a look at Ocular Therapeutix Inc (NASDAQ:OCUL), NeoGenomics, Inc. (NASDAQ:NEO), Perry Ellis International, Inc. (NASDAQ:PERY), and Addus Homecare Corporation (NASDAQ:ADUS). All of these stocks’ market caps resemble KE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OCUL | 12 | 39161 | -2 |
| NEO | 9 | 15028 | 0 |
| PERY | 17 | 31983 | 1 |
| ADUS | 10 | 18636 | 3 |
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $26 million. That figure was $24 million in KE’s case. Perry Ellis International, Inc. (NASDAQ:PERY) is the most popular stock in this table. On the other hand NeoGenomics, Inc. (NASDAQ:NEO) is the least popular one with only 9 bullish hedge fund positions. Kimball Electronics Inc (NASDAQ:KE) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal, and we’d rather spend our time researching stocks that hedge funds are piling on. In this case, PERY might be a better alternative.