Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Amazon, Facebook and Alibaba, have not done well in Q4 due to various reasons. Nevertheless, the data show elite investors’ consensus picks have done well on average over the long-term. The top 15 S&P 500 stocks among hedge funds at the end of September 2018 returned an average of 1% through March 15th whereas the S&P 500 Index ETF lost 2.2% during the same period. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at Kimball International Inc (NASDAQ:KBAL) from the perspective of those elite funds.
Kimball International Inc (NASDAQ:KBAL) shareholders have witnessed a decrease in hedge fund interest in recent months. Our calculations also showed that KBAL isn’t among the 30 most popular stocks among hedge funds.
To most traders, hedge funds are seen as unimportant, old investment tools of the past. While there are greater than 8000 funds with their doors open at present, We look at the masters of this group, around 750 funds. It is estimated that this group of investors manage the majority of the smart money’s total asset base, and by tailing their best equity investments, Insider Monkey has discovered a few investment strategies that have historically surpassed the S&P 500 index. Insider Monkey’s flagship hedge fund strategy defeated the S&P 500 index by nearly 5 percentage points annually since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 27.5% since February 2017 (through March 12th) even though the market was up nearly 25% during the same period. We just shared a list of 6 short targets in our latest quarterly update and they are already down an average of 6% in less than a month.
We’re going to take a glance at the new hedge fund action regarding Kimball International Inc (NASDAQ:KBAL).
How are hedge funds trading Kimball International Inc (NASDAQ:KBAL)?
Heading into the first quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -17% from the previous quarter. On the other hand, there were a total of 13 hedge funds with a bullish position in KBAL a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
Among these funds, Royce & Associates held the most valuable stake in Kimball International Inc (NASDAQ:KBAL), which was worth $39.3 million at the end of the fourth quarter. On the second spot was Renaissance Technologies which amassed $34.7 million worth of shares. Moreover, Ancora Advisors, D E Shaw, and AQR Capital Management were also bullish on Kimball International Inc (NASDAQ:KBAL), allocating a large percentage of their portfolios to this stock.
Because Kimball International Inc (NASDAQ:KBAL) has witnessed a decline in interest from the aggregate hedge fund industry, we can see that there were a few hedge funds who were dropping their positions entirely by the end of the third quarter. Intriguingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dumped the largest investment of the 700 funds followed by Insider Monkey, totaling about $1.8 million in stock. Roger Ibbotson’s fund, Zebra Capital Management, also cut its stock, about $0.2 million worth. These moves are interesting, as aggregate hedge fund interest fell by 2 funds by the end of the third quarter.
Let’s check out hedge fund activity in other stocks similar to Kimball International Inc (NASDAQ:KBAL). These stocks are KLX Energy Services Holdings, Inc. (NASDAQ:KLXE), Navigator Holdings Ltd (NYSE:NVGS), DMC Global Inc. (NASDAQ:BOOM), and OneSpan Inc. (NASDAQ:OSPN). All of these stocks’ market caps resemble KBAL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KLXE | 9 | 41774 | -12 |
| NVGS | 12 | 235591 | 4 |
| BOOM | 12 | 58547 | -4 |
| OSPN | 12 | 57897 | 0 |
| Average | 11.25 | 98452 | -3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.25 hedge funds with bullish positions and the average amount invested in these stocks was $98 million. That figure was $90 million in KBAL’s case. Navigator Holdings Ltd (NYSE:NVGS) is the most popular stock in this table. On the other hand KLX Energy Services Holdings, Inc. (NASDAQ:KLXE) is the least popular one with only 9 bullish hedge fund positions. Kimball International Inc (NASDAQ:KBAL) 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. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately KBAL wasn’t nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); KBAL investors were disappointed as the stock returned 3.9% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
