Is it smart to be bullish on Korn/Ferry International (NYSE:KFY)?
Now, according to many investors, hedge funds are perceived as bloated, old investment vehicles of a period lost to current times. Although there are over 8,000 hedge funds trading in present day, Insider Monkey aim at the upper echelon of this club, about 525 funds. It is widely held that this group oversees the majority of all hedge funds’ total capital, and by watching their highest quality equity investments, we’ve unearthed a number of investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we‘ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Equally as useful, optimistic insider trading activity is a second way to look at the financial markets. Obviously, there are a number of reasons for an insider to get rid of shares of his or her company, but just one, very simple reason why they would behave bullishly. Various empirical studies have demonstrated the valuable potential of this strategy if “monkeys” understand what to do (learn more here).
Now that that’s out of the way, let’s examine the latest info for Korn/Ferry International (NYSE:KFY).
Hedge fund activity in Korn/Ferry International (NYSE:KFY)
At Q2’s end, a total of 17 of the hedge funds we track held long positions in this stock, a change of 13% from the first quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes considerably.
As industrywide interest increased, particular hedge funds were breaking ground themselves. Royce & Associates, managed by Chuck Royce, created the most valuable position in Korn/Ferry International (NYSE:KFY). Royce & Associates had 28.5 million invested in the company at the end of the quarter. Ken Grossman and Glen Schneider’s SG Capital Management also initiated a $8.3 million position during the quarter. The other funds with brand new KFY positions are Matthew Lindenbaum’s Basswood Capital, Ken Griffin’s Citadel Investment Group, and John Overdeck and David Siegel’s Two Sigma Advisors.
How are insiders trading Korn/Ferry International (NYSE:KFY)?
Insider buying made by high-level executives is most useful when the company we’re looking at has seen transactions within the past half-year. Over the last six-month time period, Korn/Ferry International (NYSE:KFY) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll check out the relationship between both of these indicators in other stocks similar to Korn/Ferry International (NYSE:KFY). These stocks are DICE HOLDINGS, INC. (NYSE:DHX), Kelly Services, Inc. (NASDAQ:KELYA), AMN Healthcare Services, Inc. (NYSE:AHS), Compass Diversified Holdings (NYSE:CODI), and Trueblue Inc (NYSE:TBI). This group of stocks are in the staffing & outsourcing services industry and their market caps resemble KFY’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| DICE HOLDINGS, INC. (NYSE:DHX) | 14 | 0 | 0 |
| Kelly Services, Inc. (NASDAQ:KELYA) | 8 | 0 | 0 |
| AMN Healthcare Services, Inc. (NYSE:AHS) | 18 | 0 | 0 |
| Compass Diversified Holdings (NYSE:CODI) | 5 | 0 | 0 |
| Trueblue Inc (NYSE:TBI) | 13 | 0 | 0 |
Using the returns demonstrated by our tactics, regular investors should always keep one eye on hedge fund and insider trading sentiment, and Korn/Ferry International (NYSE:KFY) is an important part of this process.
