It was a rough fourth quarter for many hedge funds, which were naturally unable to overcome the big dip in the broad market, as the S&P 500 fell by about 4.8% during 2018 and average hedge fund losing about 1%. The Russell 2000, composed of smaller companies, performed even worse, trailing the S&P by more than 6 percentage points, as investors fled less-known quantities for safe havens. Luckily hedge funds were shifting their holdings into large-cap stocks. The 20 most popular hedge fund stocks actually generated an average return of 18.7% so far in 2019 and outperformed the S&P 500 ETF by 6.6 percentage points. We are done processing the latest 13f filings and in this article we will study how hedge fund sentiment towards Kimball Electronics Inc (NASDAQ:KE) changed during the first quarter.
Kimball Electronics Inc (NASDAQ:KE) has seen an increase in hedge fund interest of late. KE was in 10 hedge funds’ portfolios at the end of March. There were 7 hedge funds in our database with KE positions at the end of the previous quarter. Our calculations also showed that ke isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We’re going to take a look at the new hedge fund action regarding Kimball Electronics Inc (NASDAQ:KE).
Hedge fund activity in Kimball Electronics Inc (NASDAQ:KE)
Heading into the second quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 43% from the previous quarter. On the other hand, there were a total of 11 hedge funds with a bullish position in KE a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Chuck Royce’s Royce & Associates has the largest position in Kimball Electronics Inc (NASDAQ:KE), worth close to $8.3 million, amounting to 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Jim Simons of Renaissance Technologies, with a $7.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other members of the smart money that hold long positions encompass Frederick DiSanto’s Ancora Advisors, D. E. Shaw’s D E Shaw and Israel Englander’s Millennium Management.
Now, some big names were breaking ground themselves. Millennium Management, managed by Israel Englander, initiated the biggest position in Kimball Electronics Inc (NASDAQ:KE). Millennium Management had $1.3 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.2 million position during the quarter. The only other fund with a new position in the stock is Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Kimball Electronics Inc (NASDAQ:KE) but similarly valued. We will take a look at New Age Beverages Corporation (NASDAQ:NBEV), Teekay Corporation (NYSE:TK), Mistras Group, Inc. (NYSE:MG), and Roadrunner Transportation Systems Inc (NYSE:RRTS). This group of stocks’ market valuations are similar to KE’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NBEV | 8 | 9004 | 4 |
| TK | 10 | 16401 | 3 |
| MG | 10 | 27593 | -2 |
| RRTS | 7 | 356885 | 1 |
| Average | 8.75 | 102471 | 1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.75 hedge funds with bullish positions and the average amount invested in these stocks was $102 million. That figure was $23 million in KE’s case. Teekay Corporation (NYSE:TK) is the most popular stock in this table. On the other hand Roadrunner Transportation Systems Inc (NYSE:RRTS) is the least popular one with only 7 bullish hedge fund positions. Kimball Electronics Inc (NASDAQ:KE) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately KE wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on KE were disappointed as the stock returned -3.9% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
