With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter of 2021. One of these stocks was Koss Corporation (NASDAQ:KOSS).
Is KOSS stock a buy? Koss Corporation (NASDAQ:KOSS) was in 4 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 3. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. KOSS investors should pay attention to an increase in activity from the world’s largest hedge funds lately. There were 2 hedge funds in our database with KOSS positions at the end of the fourth quarter. Our calculations also showed that KOSS isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Donald Sussman of Paloma Partners
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to take a peek at the recent hedge fund action surrounding Koss Corporation (NASDAQ:KOSS).
Do Hedge Funds Think KOSS Is A Good Stock To Buy Now?
At first quarter’s end, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 100% from the fourth quarter of 2020. On the other hand, there were a total of 2 hedge funds with a bullish position in KOSS a year ago. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors has the most valuable position in Koss Corporation (NASDAQ:KOSS), worth close to $1 million, corresponding to less than 0.1%% of its total 13F portfolio. The second most bullish fund manager is Citadel Investment Group, led by Ken Griffin, holding a $0.8 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining peers with similar optimism contain Donald Sussman’s Paloma Partners, Israel Englander’s Millennium Management and . In terms of the portfolio weights assigned to each position Paloma Partners allocated the biggest weight to Koss Corporation (NASDAQ:KOSS), around 0.01% of its 13F portfolio. Schonfeld Strategic Advisors is also relatively very bullish on the stock, setting aside 0.01 percent of its 13F equity portfolio to KOSS.
As industrywide interest jumped, key hedge funds have jumped into Koss Corporation (NASDAQ:KOSS) headfirst. Schonfeld Strategic Advisors, managed by Ryan Tolkin (CIO), initiated the most outsized position in Koss Corporation (NASDAQ:KOSS). Schonfeld Strategic Advisors had $1 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.8 million position during the quarter. The following funds were also among the new KOSS investors: Donald Sussman’s Paloma Partners and Israel Englander’s Millennium Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Koss Corporation (NASDAQ:KOSS) but similarly valued. We will take a look at Clearsign Technologies Corp (NASDAQ:CLIR), SMTC Corporation (NASDAQ:SMTX), VivoPower International PLC (NASDAQ:VVPR), NeuBase Therapeutics, Inc. (NASDAQ:NBSE), Tarena International Inc (NASDAQ:TEDU), CooTek (Cayman) Inc. (NYSE:CTK), and Penns Woods Bancorp, Inc. (NASDAQ:PWOD). This group of stocks’ market valuations resemble KOSS’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CLIR | 3 | 1685 | 2 |
| SMTX | 7 | 22992 | 1 |
| VVPR | 2 | 1872 | -1 |
| NBSE | 11 | 24315 | 3 |
| TEDU | 4 | 2159 | 2 |
| CTK | 5 | 2709 | 3 |
| PWOD | 1 | 4680 | 0 |
| Average | 4.7 | 8630 | 1.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 4.7 hedge funds with bullish positions and the average amount invested in these stocks was $9 million. That figure was $3 million in KOSS’s case. NeuBase Therapeutics, Inc. (NASDAQ:NBSE) is the most popular stock in this table. On the other hand Penns Woods Bancorp, Inc. (NASDAQ:PWOD) is the least popular one with only 1 bullish hedge fund positions. Koss Corporation (NASDAQ:KOSS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for KOSS is 52. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. A small number of hedge funds were also right about betting on KOSS as the stock returned 12.4% since the end of the first quarter (through 6/11) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
