KKR Financial Holdings LLC (KFN): Insiders Are Buying, Should You?

KKR Financial Holdings LLC (NYSE:KFN) was in 18 hedge funds’ portfolio at the end of the first quarter of 2013. KFN investors should pay attention to a decrease in support from the world’s most elite money managers recently. There were 19 hedge funds in our database with KFN holdings at the end of the previous quarter.

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With these “truths” under our belt, we’re going to take a look at the recent action encompassing KKR Financial Holdings LLC (NYSE:KFN).

What does the smart money think about KKR Financial Holdings LLC (NYSE:KFN)?

At the end of the first quarter, a total of 18 of the hedge funds we track were bullish in this stock, a change of -5% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their stakes significantly.

Of the funds we track, Leon Cooperman’s Omega Advisors had the biggest position in KKR Financial Holdings LLC (NYSE:KFN), worth close to $152.8 million, accounting for 2.4% of its total 13F portfolio. On Omega Advisors’s heels is Wayne Cooperman of Cobalt Capital Management, with a $35.4 million position; the fund has 2.7% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Anthony Bozza’s Lakewood Capital Management, Jim Simons’s Renaissance Technologies and Chuck Royce’s Royce & Associates.

Judging by the fact that KKR Financial Holdings LLC (NYSE:KFN) has experienced bearish sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of hedge funds that decided to sell off their full holdings last quarter. Intriguingly, Alok Agrawal’s Bloom Tree Partners dumped the biggest investment of the “upper crust” of funds we track, comprising close to $6.6 million in stock.. Joseph A. Jolson’s fund, Harvest Capital Strategies, also said goodbye to its stock, about $0.8 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 1 funds last quarter.

Insider trading activity in KKR Financial Holdings LLC (NYSE:KFN)

Insider trading activity, especially when it’s bullish, is at its handiest when the primary stock in question has experienced transactions within the past six months. Over the last six-month time period, KKR Financial Holdings LLC (NYSE:KFN) has experienced 2 unique insiders purchasing, and 3 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to KKR Financial Holdings LLC (NYSE:KFN). These stocks are Home Loan Servicing Solutions Ltd (NASDAQ:HLSS), Walter Investment Management Corp (NYSE:WAC), Nationstar Mortgage Holdings Inc (NYSE:NSM), Altisource Portfolio Solutions S.A. (NASDAQ:ASPS), and Invesco Mortgage Capital Inc (NYSE:IVR). This group of stocks are the members of the mortgage investment industry and their market caps are similar to KFN’s market cap.

With the returns exhibited by Insider Monkey’s tactics, everyday investors must always watch hedge fund and insider trading activity, and KKR Financial Holdings LLC (NYSE:KFN) is an important part of this process.

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