How do you pick the next stock to invest in? One way would be to spend days of research browsing through thousands of publicly traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of capital and have to conduct due diligence while choosing their next pick. They don’t always get it right, but, on average, their stock picks historically generated strong returns after adjusting for known risk factors. With this in mind, let’s take a look at the recent hedge fund activity surrounding Kirby Corporation (NYSE:KEX).
Is Kirby Corporation (NYSE:KEX) a worthy investment right now? Money managers were in an optimistic mood. The number of bullish hedge fund positions rose by 3 recently. Kirby Corporation (NYSE:KEX) was in 24 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 34. Our calculations also showed that KEX isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Jim Simons of Renaissance Technologies
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. With all of this in mind let’s take a peek at the latest hedge fund action surrounding Kirby Corporation (NYSE:KEX).
Do Hedge Funds Think KEX Is A Good Stock To Buy Now?
At Q3’s end, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of 14% from the previous quarter. On the other hand, there were a total of 34 hedge funds with a bullish position in KEX a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Kirby Corporation (NYSE:KEX) was held by Hound Partners, which reported holding $103.1 million worth of stock at the end of September. It was followed by D E Shaw with a $53.8 million position. Other investors bullish on the company included Citadel Investment Group, Renaissance Technologies, and Royce & Associates. In terms of the portfolio weights assigned to each position Mountaineer Partners Management allocated the biggest weight to Kirby Corporation (NYSE:KEX), around 5.62% of its 13F portfolio. Hound Partners is also relatively very bullish on the stock, earmarking 5.48 percent of its 13F equity portfolio to KEX.
With a general bullishness amongst the heavyweights, key hedge funds have jumped into Kirby Corporation (NYSE:KEX) headfirst. Mountaineer Partners Management, managed by Mark Lee, assembled the most outsized position in Kirby Corporation (NYSE:KEX). Mountaineer Partners Management had $8.6 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $7.8 million position during the quarter. The following funds were also among the new KEX investors: Greg Eisner’s Engineers Gate Manager, Jinghua Yan’s TwinBeech Capital, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Let’s check out hedge fund activity in other stocks similar to Kirby Corporation (NYSE:KEX). We will take a look at Kontoor Brands, Inc. (NASDAQ:KTB), Kennametal Inc. (NYSE:KMT), Apellis Pharmaceuticals, Inc. (NASDAQ:APLS), Cytek Biosciences Inc. (NASDAQ:CTKB), TransAlta Corporation (NYSE:TAC), Cactus, Inc. (NYSE:WHD), and Herman Miller, Inc. (NASDAQ:MLHR). This group of stocks’ market valuations are closest to KEX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KTB | 17 | 118883 | -6 |
| KMT | 19 | 434106 | 1 |
| APLS | 30 | 510124 | -1 |
| CTKB | 13 | 524565 | 13 |
| TAC | 12 | 111236 | -1 |
| WHD | 10 | 84988 | -4 |
| MLHR | 21 | 152517 | -2 |
| Average | 17.4 | 276631 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.4 hedge funds with bullish positions and the average amount invested in these stocks was $277 million. That figure was $296 million in KEX’s case. Apellis Pharmaceuticals, Inc. (NASDAQ:APLS) is the most popular stock in this table. On the other hand Cactus, Inc. (NYSE:WHD) is the least popular one with only 10 bullish hedge fund positions. Kirby Corporation (NYSE:KEX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for KEX is 64.2. 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. Hedge funds were also right about betting on KEX as the stock returned 21% since the end of Q3 (through 12/9) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
