Is Quaker Chemical Corp (NYSE:KWR) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Quaker Chemical Corp (NYSE:KWR) has experienced an increase in hedge fund interest recently. Quaker Chemical Corp (NYSE:KWR) was in 18 hedge funds’ portfolios at the end of March. The all time high for this statistic is 19. Our calculations also showed that KWR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Ken Griffin of Citadel Investment Group
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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 let’s check out the key hedge fund action regarding Quaker Chemical Corp (NYSE:KWR).
Do Hedge Funds Think KWR Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of 38% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards KWR over the last 23 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Quaker Chemical Corp (NYSE:KWR) was held by Royce & Associates, which reported holding $109.4 million worth of stock at the end of December. It was followed by CaaS Capital with a $26.7 million position. Other investors bullish on the company included Greenhouse Funds, Renaissance Technologies, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Greenhouse Funds allocated the biggest weight to Quaker Chemical Corp (NYSE:KWR), around 2.3% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, dishing out 0.74 percent of its 13F equity portfolio to KWR.
As industrywide interest jumped, some big names have been driving this bullishness. Renaissance Technologies, established the largest position in Quaker Chemical Corp (NYSE:KWR). Renaissance Technologies had $5.5 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also initiated a $3.1 million position during the quarter. The other funds with brand new KWR positions are Parvinder Thiara’s Athanor Capital, Greg Eisner’s Engineers Gate Manager, and Jinghua Yan’s TwinBeech Capital.
Let’s now take a look at hedge fund activity in other stocks similar to Quaker Chemical Corp (NYSE:KWR). These stocks are ICU Medical, Inc. (NASDAQ:ICUI), WESCO International, Inc. (NYSE:WCC), Cricut, Inc. (NASDAQ:CRCT), Medallia, Inc. (NYSE:MDLA), Canada Goose Holdings Inc. (NYSE:GOOS), Madison Square Garden Sports Corp. (NYSE:MSGS), and Avient Corporation (NYSE:AVNT). This group of stocks’ market caps are similar to KWR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ICUI | 26 | 381958 | 4 |
| WCC | 28 | 1026615 | 5 |
| CRCT | 12 | 45232 | 12 |
| MDLA | 19 | 296296 | -2 |
| GOOS | 19 | 207847 | 0 |
| MSGS | 47 | 934404 | 3 |
| AVNT | 24 | 232031 | 7 |
| Average | 25 | 446340 | 4.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $446 million. That figure was $184 million in KWR’s case. Madison Square Garden Sports Corp. (NYSE:MSGS) is the most popular stock in this table. On the other hand Cricut, Inc. (NASDAQ:CRCT) is the least popular one with only 12 bullish hedge fund positions. Quaker Chemical Corp (NYSE:KWR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for KWR is 47. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 28.5% in 2021 through July 23rd and surpassed the market again by 10.1 percentage points. Unfortunately KWR wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); KWR investors were disappointed as the stock returned -1.3% since the end of March (through 7/23) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
Follow Quaker Chemical Corp (NYSE:KWR)
Follow Quaker Chemical Corp (NYSE:KWR)
Suggested Articles:
- 25 Countries with the Most Debt Per Capita and Debt to GDP: 2020 Rankings
- 15 Largest Law Firms In The World
- 15 Best States to Invest in Real Estate in 2021
Disclosure: None. This article was originally published at Insider Monkey.
