Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Kearny Financial Corp. (NASDAQ:KRNY) shareholders have witnessed a decrease in activity from the world’s largest hedge funds recently. 18 hedge funds that we track were long the stock on September 30. There were 19 hedge funds in our database with KRNY positions 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 Acorda Therapeutics Inc (NASDAQ:ACOR), Aerojet Rocketdyne Holdings Inc (NYSE:AJRD), and Amerisafe, Inc. (NASDAQ:AMSF) to gather more data points.
Follow Kearny Financial Corp. (NASDAQ:KRNY)
Follow Kearny Financial Corp. (NASDAQ:KRNY)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
TZIDO SUN/Shutterstock.com
How have hedgies been trading Kearny Financial Corp. (NASDAQ:KRNY)?
At the end of the third quarter, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a decline of 5% from the previous quarter, as hedge fund ownership continues to trend down. The graph below displays the number of hedge funds with bullish position in KRNY over the last 5 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jim Simons’ Renaissance Technologies has the most valuable position in Kearny Financial Corp. (NASDAQ:KRNY), worth close to $39.5 million. Sitting at the No. 2 spot is Michael A. Price and Amos Meron’s Empyrean Capital Partners holding a $26.5 million position; the fund has 1.3% of its 13F portfolio invested in the stock. Some other peers with similar optimism consist of Michael Price’s MFP Investors, Lawrence Seidman’s Seidman Investment Partnership, and Tim Mullen’s Swift Run Capital Management. We should note that MFP Investors is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Seeing as Kearny Financial Corp. (NASDAQ:KRNY) has experienced a decline in interest from hedge fund managers, we can see that there lies a certain “tier” of hedge funds that decided to sell off their full holdings last quarter. Intriguingly, Malcolm Fairbairn’s Ascend Capital dropped the biggest stake of the 700 funds followed by Insider Monkey, totaling close to $10 million in stock, and Dmitry Balyasny’s Balyasny Asset Management was right behind this move, as the fund sold off about $0.4 million worth of shares.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Kearny Financial Corp. (NASDAQ:KRNY) but similarly valued. These stocks are Acorda Therapeutics Inc (NASDAQ:ACOR), Aerojet Rocketdyne Holdings Inc (NYSE:AJRD), Amerisafe, Inc. (NASDAQ:AMSF), and American Equity Investment Life Holding (NYSE:AEL). All of these stocks’ market caps are closest to KRNY’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ACOR | 19 | 268345 | -2 |
| AJRD | 14 | 271637 | -2 |
| AMSF | 8 | 17850 | -3 |
| AEL | 13 | 87053 | -4 |
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $161 million. That figure was $131 million in KRNY’s case. Acorda Therapeutics Inc (NASDAQ:ACOR) is the most popular stock in this table. On the other hand Amerisafe, Inc. (NASDAQ:AMSF) is the least popular one with only 8 bullish hedge fund positions. Kearny Financial Corp. (NASDAQ:KRNY) 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. In this regard ACOR might be a better candidate to consider taking a long position in.
Disclosure: None
