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 7.6% over the 12-month period ending November 21, 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 mid-cap stocks by the best performing hedge funds monitored by Insider Monkey generated a return of 18% over the same time span. 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 Kimball International Inc (NASDAQ:KBAL).
Kimball International Inc (NASDAQ:KBAL) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 9 hedge funds’ portfolios at the end of September, same as at the end of June. At the end of this article we will also compare KBAL to other stocks including LivePerson, Inc. (NASDAQ:LPSN), Sunedison Semiconductor Ltd (NASDAQ:SEMI), and MYR Group Inc (NASDAQ:MYRG) to get a better sense of its popularity.
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.
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How are hedge funds trading Kimball International Inc (NASDAQ:KBAL)?
At Q3’s end, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, unchanged from the previous quarter. The graph below displays the number of hedge funds with bullish position in KBAL over the last 5 quarters, which has remained extremely stable. So, let’s check out 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 of Royce & Associates holds the most valuable position in Kimball International Inc (NASDAQ:KBAL). Royce & Associates has a $24.9 million position in the stock. On Royce & Associates’ heels is Renaissance Technologies, one of the largest hedge funds in the world, with an $11.8 million position. Other peers that hold long positions contain Mario Gabelli’s GAMCO Investors, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and David E. Shaw’s D E Shaw. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-micro-cap stocks.
We already know that not all hedge funds are bullish on the stock and some hedge funds actually cashed in their positions entirely. It’s worth mentioning that Israel Englander’s Millennium Management cashed in the biggest position of all the hedgies watched by Insider Monkey, valued at about $0.7 million in stock. Cliff Asness’ fund, AQR Capital Management, also dumped its stock, about $0.1 million worth.
Let’s check out hedge fund activity in other stocks similar to Kimball International Inc (NASDAQ:KBAL). We will take a look at LivePerson, Inc. (NASDAQ:LPSN), Sunedison Semiconductor Ltd (NASDAQ:SEMI), MYR Group Inc (NASDAQ:MYRG), and El Pollo LoCo Holdings Inc (NASDAQ:LOCO). All of these stocks’ market caps match KBAL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LPSN | 14 | 69467 | -4 |
| SEMI | 22 | 150971 | 10 |
| MYRG | 16 | 47746 | 3 |
| LOCO | 8 | 13791 | -3 |
As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $70 million. That figure was $45 million in KBAL’s case. Sunedison Semiconductor Ltd (NASDAQ:SEMI) is the most popular stock in this table. On the other hand El Pollo LoCo Holdings Inc (NASDAQ:LOCO) is the least popular one with only 8 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. In this regard SEMI might be a better candidate to consider taking a long position in.
Disclosure: None
