“Value has performed relatively poorly since the 2017 shift, but we believe challenges to the S&P 500’s dominance are mounting and resulting active opportunities away from the index are growing. At some point, this fault line will break, likely on the back of rising rates, and all investors will be reminded that the best time to diversify away from the winners is when it is most painful. The bargain of capturing long-term value may be short-term pain, but enough is eventually enough and it comes time to harvest the benefits.,” said Clearbridge Investments in its market commentary. We aren’t sure whether long-term interest rates will top 5% and value stocks outperform growth, but we follow hedge fund investor letters to understand where the markets and stocks might be going. That’s why we believe it would be worthwhile to take a look at the hedge fund sentiment on Kemper Corporation (NYSE:KMPR) in order to identify whether reputable and successful top money managers continue to believe in its potential.
Kemper Corporation (NYSE:KMPR) was in 14 hedge funds’ portfolios at the end of September. KMPR shareholders have witnessed an increase in activity from the world’s largest hedge funds in recent months. There were 9 hedge funds in our database with KMPR positions at the end of the previous quarter. Our calculations also showed that kmpr isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s check out the key hedge fund action regarding Kemper Corporation (NYSE:KMPR).
What does the smart money think about Kemper Corporation (NYSE:KMPR)?
At Q3’s end, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of 56% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards KMPR over the last 13 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Kemper Corporation (NYSE:KMPR) was held by Citadel Investment Group, which reported holding $32.1 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $26.7 million position. Other investors bullish on the company included Millennium Management, Chilton Investment Company, and AQR Capital Management.
As aggregate interest increased, key money managers have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, established the most valuable position in Kemper Corporation (NYSE:KMPR). Citadel Investment Group had $32.1 million invested in the company at the end of the quarter. Richard Chilton’s Chilton Investment Company also made a $18.8 million investment in the stock during the quarter. The other funds with new positions in the stock are David Costen Haley’s HBK Investments, Matthew Tewksbury’s Stevens Capital Management, and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Kemper Corporation (NYSE:KMPR) but similarly valued. We will take a look at Oshkosh Corporation (NYSE:OSK), Viper Energy Partners LP (NASDAQ:VNOM), Loxo Oncology Inc (NASDAQ:LOXO), and Primerica, Inc. (NYSE:PRI). This group of stocks’ market valuations match KMPR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OSK | 30 | 448412 | 10 |
| VNOM | 12 | 139992 | 2 |
| LOXO | 30 | 909394 | -2 |
| PRI | 12 | 467230 | 3 |
| Average | 21 | 491257 | 3.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $491 million. That figure was $113 million in KMPR’s case. Oshkosh Corporation (NYSE:OSK) is the most popular stock in this table. On the other hand Viper Energy Partners LP (NASDAQ:VNOM) is the least popular one with only 12 bullish hedge fund positions. Kemper Corporation (NYSE:KMPR) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard OSK might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
