Is Korn/Ferry International (NYSE:KFY) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy league graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Is Korn/Ferry International (NYSE:KFY) a healthy stock for your portfolio? Investors who are in the know are becoming less hopeful. The number of long hedge fund bets shrunk by 1 in recent months. Our calculations also showed that kfy isn’t among the 30 most popular stocks among hedge funds. KFY was in 20 hedge funds’ portfolios at the end of the third quarter of 2018. There were 21 hedge funds in our database with KFY positions at the end of the previous quarter.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. 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.
We’re going to take a peek at the fresh hedge fund action encompassing Korn/Ferry International (NYSE:KFY).
Hedge fund activity in Korn/Ferry International (NYSE:KFY)
At the end of the third quarter, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -5% from the previous quarter. On the other hand, there were a total of 19 hedge funds with a bullish position in KFY at the beginning of this year. 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, GLG Partners, managed by Noam Gottesman, holds the number one position in Korn/Ferry International (NYSE:KFY). GLG Partners has a $54.5 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is Royce & Associates, led by Chuck Royce, holding a $18.1 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other professional money managers that hold long positions contain Ian Simm’s Impax Asset Management, Jim Simons’s Renaissance Technologies and Principal Global Investors’s Columbus Circle Investors.
Seeing as Korn/Ferry International (NYSE:KFY) has witnessed bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of hedgies who were dropping their positions entirely by the end of the third quarter. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital cut the largest stake of all the hedgies monitored by Insider Monkey, valued at close to $5.1 million in stock. Peter Algert and Kevin Coldiron’s fund, Algert Coldiron Investors, also dropped its stock, about $3.8 million worth. These transactions are important to note, as total hedge fund interest dropped by 1 funds by the end of the third quarter.
Let’s go over hedge fund activity in other stocks similar to Korn/Ferry International (NYSE:KFY). We will take a look at MakeMyTrip Limited (NASDAQ:MMYT), Carpenter Technology Corporation (NYSE:CRS), Columbia Property Trust Inc (NYSE:CXP), and Exponent, Inc. (NASDAQ:EXPO). This group of stocks’ market valuations are similar to KFY’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MMYT | 12 | 57781 | -2 |
| CRS | 14 | 106280 | 0 |
| CXP | 13 | 136349 | 3 |
| EXPO | 12 | 100619 | 2 |
| Average | 12.75 | 100257 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.75 hedge funds with bullish positions and the average amount invested in these stocks was $100 million. That figure was $119 million in KFY’s case. Carpenter Technology Corporation (NYSE:CRS) is the most popular stock in this table. On the other hand MakeMyTrip Limited (NASDAQ:MMYT) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Korn/Ferry International (NYSE:KFY) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None. This article was originally published at Insider Monkey.
