At the moment, there are a multitude of metrics shareholders can use to monitor Mr. Market. A couple of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top hedge fund managers can outclass the broader indices by a very impressive amount (see just how much).
Equally as necessary, bullish insider trading activity is another way to analyze the financial markets. Obviously, there are plenty of incentives for a bullish insider to sell shares of his or her company, but just one, very obvious reason why they would behave bullishly. Various academic studies have demonstrated the impressive potential of this method if piggybackers know what to do (learn more here).
Keeping this in mind, we’re going to examine the latest info surrounding KB Home (NYSE:KBH).
How have hedgies been trading KB Home (NYSE:KBH)?
Heading into Q3, a total of 20 of the hedge funds we track were long in this stock, a change of 18% from the first quarter. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their holdings substantially.
According to our 13F database, Odey Asset Management Group, managed by Crispin Odey, holds the biggest position in KB Home (NYSE:KBH). Odey Asset Management Group has a $57.3 million position in the stock, comprising 2.2% of its 13F portfolio. The second largest stake is held by Donald Chiboucis of Columbus Circle Investors, with a $24.6 million position; 0.2% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism include Israel Englander’s Millennium Management, Brian Taylor’s Pine River Capital Management and Ken Griffin’s Citadel Investment Group.
Consequently, certain bigger names were breaking ground themselves. Odey Asset Management Group, managed by Crispin Odey, created the biggest position in KB Home (NYSE:KBH). Odey Asset Management Group had 57.3 million invested in the company at the end of the quarter. Howard Marks’s Oaktree Capital Management also made a $31.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Donald Chiboucis’s Columbus Circle Investors, Israel Englander’s Millennium Management, and Brian Taylor’s Pine River Capital Management.
How have insiders been trading KB Home (NYSE:KBH)?
Insider buying is particularly usable when the company in focus has seen transactions within the past 180 days. Over the latest 180-day time frame, KB Home (NYSE:KBH) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll check out the relationship between both of these indicators in other stocks similar to KB Home (NYSE:KBH). These stocks are Gafisa SA (ADR) (NYSE:GFA), Meritage Homes Corp (NYSE:MTH), The Ryland Group, Inc. (NYSE:RYL), M.D.C. Holdings, Inc. (NYSE:MDC), and Standard Pacific Corp. (NYSE:SPF). This group of stocks are in the residential construction industry and their market caps are similar to KBH’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Gafisa SA (ADR) (NYSE:GFA) | 8 | 0 | 0 |
| Meritage Homes Corp (NYSE:MTH) | 20 | 0 | 0 |
| The Ryland Group, Inc. (NYSE:RYL) | 20 | 0 | 0 |
| M.D.C. Holdings, Inc. (NYSE:MDC) | 17 | 0 | 0 |
| Standard Pacific Corp. (NYSE:SPF) | 29 | 0 | 0 |
Using the returns shown by Insider Monkey’s research, average investors must always pay attention to hedge fund and insider trading sentiment, and KB Home (NYSE:KBH) applies perfectly to this mantra.
