Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 750 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Koppers Holdings Inc. (NYSE:KOP).
Is Koppers Holdings Inc. (NYSE:KOP) going to take off soon? Investors who are in the know are taking an optimistic view. The number of bullish hedge fund bets inched up by 1 lately. Our calculations also showed that KOP isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). KOP was in 13 hedge funds’ portfolios at the end of September. There were 12 hedge funds in our database with KOP positions at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
At the moment there are tons of methods stock market investors put to use to evaluate publicly traded companies. Two of the less utilized methods are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the elite money managers can outpace their index-focused peers by a significant margin (see the details here).
Ken Griffin of Citadel Investment Group
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a look at the key hedge fund action surrounding Koppers Holdings Inc. (NYSE:KOP).
Hedge fund activity in Koppers Holdings Inc. (NYSE:KOP)
At Q3’s end, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of 8% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards KOP over the last 17 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Mitch Cantor’s Mountain Lake Investment Management has the most valuable position in Koppers Holdings Inc. (NYSE:KOP), worth close to $16.8 million, comprising 8.5% of its total 13F portfolio. On Mountain Lake Investment Management’s heels is Millennium Management, managed by Israel Englander, which holds a $8.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism encompass Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Ken Griffin’s Citadel Investment Group and Brandon Osten’s Venator Capital Management. In terms of the portfolio weights assigned to each position Mountain Lake Investment Management allocated the biggest weight to Koppers Holdings Inc. (NYSE:KOP), around 8.5% of its 13F portfolio. Venator Capital Management is also relatively very bullish on the stock, earmarking 2 percent of its 13F equity portfolio to KOP.
As industrywide interest jumped, key money managers were leading the bulls’ herd. Renaissance Technologies assembled the largest position in Koppers Holdings Inc. (NYSE:KOP). Renaissance Technologies had $1.3 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace also made a $1.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Donald Sussman’s Paloma Partners and Thomas Bailard’s Bailard Inc.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Koppers Holdings Inc. (NYSE:KOP) but similarly valued. These stocks are Ruhnn Holding Limited (NASDAQ:RUHN), Krystal Biotech, Inc. (NASDAQ:KRYS), Globalstar, Inc. (NYSEAMERICAN:GSAT), and Quanex Building Products Corporation (NYSE:NX). All of these stocks’ market caps are closest to KOP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RUHN | 1 | 115 | -1 |
| KRYS | 11 | 159078 | -1 |
| GSAT | 11 | 97484 | -2 |
| NX | 17 | 60705 | 4 |
| Average | 10 | 79346 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $79 million. That figure was $41 million in KOP’s case. Quanex Building Products Corporation (NYSE:NX) is the most popular stock in this table. On the other hand Ruhnn Holding Limited (NASDAQ:RUHN) is the least popular one with only 1 bullish hedge fund positions. Koppers Holdings Inc. (NYSE:KOP) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on KOP as the stock returned 26.8% during the fourth quarter (through the end of November) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
