It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 5.2% over the 12-month period ending October 30, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored S&P 500 stocks by the hedge funds monitored by Insider Monkey (as of September 2014) generated a return of 9.5% over the same time span, with 63% of these stocks outperforming the benchmark. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in iKang Healthcare Group Inc (ADR) (NASDAQ:KANG).
Is iKang Healthcare Group Inc (ADR) (NASDAQ:KANG) a bargain? The best stock pickers are taking a bearish view. The number of bullish hedge fund positions retreated by 5 recently. The trading environment surrounding iKang Healthcare Group Inc (ADR) (NASDAQ:KANG) shared a similar sentiment, with the stock losing 23.47% value throughout the quarter.
To find out more about the hedge fund behavior, we will also compare iKang Healthcare Group Inc (ADR) (NASDAQ:KANG) to other stocks including Bob Evans Farms Inc (NASDAQ:BOBE), Ingles Markets, Incorporated (NASDAQ:IMKTA), and Caesars Acquisition Company (NASDAQ:CACQ) to get a better sense of its popularity.
Today, there are numerous tools market participants employ to evaluate publicly traded companies. A couple of the less known tools are hedge fund and insider trading interest. We have shown that, historically, those who follow the best picks of the best investment managers can beat the broader indices by a healthy margin (see the details here).
Now, we’re going to take a look at the new action surrounding iKang Healthcare Group Inc (ADR) (NASDAQ:KANG).
What does the smart money think about iKang Healthcare Group Inc (ADR) (NASDAQ:KANG)?
At the end of the third quarter, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a drop of 38% from the previous quarter. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Robert Karr’s Joho Capital has the biggest position in iKang Healthcare Group Inc (ADR) (NASDAQ:KANG), worth close to $19.1 million, amounting to 5.5% of its total 13F portfolio. Sitting at the No. 2 spot is OZ Management, managed by Daniel S. Och, which holds a $11.7 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Remaining peers that are bullish contain Jacob Gottlieb’s Visium Asset Management, James Dondero’s Highland Capital Management, and Howard Marks’ Oaktree Capital Management.