Is Kraton Performance Polymers Inc (NYSE:KRA) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Kraton Performance Polymers Inc (NYSE:KRA) has experienced a decrease in activity from the world’s largest hedge funds of late. 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 Xura Inc (NASDAQ:MESG), Hannon Armstrong Sustnbl Infrstr Cap Inc (NYSE:HASI), and TriCo Bancshares (NASDAQ:TCBK) to gather more data points.
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Follow Kraton Corp (NYSE:KRA)
Today there are many tools market participants put to use to evaluate stocks. A duo of the most useful tools are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the elite investment managers can outpace the market by a healthy margin (see the details here).
Keeping this in mind, let’s take a glance at the latest action encompassing Kraton Performance Polymers Inc (NYSE:KRA).
What does the smart money think about Kraton Performance Polymers Inc (NYSE:KRA)?
Heading into Q4, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a decline of 5% from the second quarter. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Debra Fine’s Fine Capital Partners has the largest position in Kraton Performance Polymers Inc (NYSE:KRA), worth close to $46.6 million, corresponding to 4.6% of its total 13F portfolio. Coming in second is Royce & Associates, managed by Chuck Royce, which holds a $21.4 million position; 0.1% of its 13F portfolio is allocated to the stock. Other professional money managers with similar optimism consist of Marc Majzner’s Clearline Capital, Adam Fox and Samuel Elder’s Altalis Capital Partners and Youlia Miteva’s Proxima Capital Management.
Since Kraton Performance Polymers Inc (NYSE:KRA) has faced declining sentiment from the aggregate hedge fund industry, it’s safe to say that there exists a select few hedgies that decided to sell off their entire stakes by the end of the third quarter. Intriguingly, Michael M. Rothenberg’s Moab Capital Partners said goodbye to the largest investment of all the hedgies watched by Insider Monkey, valued at close to $4.7 million in call options., and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund dropped about $0.2 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 1 funds by the end of the third quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Kraton Performance Polymers Inc (NYSE:KRA) but similarly valued. These stocks are Xura Inc (NASDAQ:MESG), Hannon Armstrong Sustnbl Infrstr Cap Inc (NYSE:HASI), TriCo Bancshares (NASDAQ:TCBK), and Regenxbio Inc (NASDAQ:RGNX). This group of stocks’ market values are closest to KRA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MESG | 11 | 98132 | -5 |
| HASI | 8 | 45300 | -1 |
| TCBK | 10 | 47544 | 1 |
| RGNX | 17 | 145789 | 17 |
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 $84 million, which is lower than the $128 million in KRA’s case. Regenxbio Inc (NASDAQ:RGNX) is the most popular stock in this table. On the other hand Hannon Armstrong Sustnbl Infrstr Cap Inc (NYSE:HASI) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Kraton Performance Polymers Inc (NYSE:KRA) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
