We at Insider Monkey have gone over 866 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article, we look at what those funds think of Kaleyra, Inc. (NASDAQ:KLR) based on that data.
Kaleyra, Inc. (NASDAQ:KLR) investors should pay attention to an increase in support from the world’s most elite money managers recently. Kaleyra, Inc. (NASDAQ:KLR) was in 18 hedge funds’ portfolios at the end of March. The all time high for this statistic is 13. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that KLR 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.
David Atterbury of Whetstone Capital Advisors
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Do Hedge Funds Think KLR Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 38% from the previous quarter. On the other hand, there were a total of 7 hedge funds with a bullish position in KLR a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Royce & Associates held the most valuable stake in Kaleyra, Inc. (NASDAQ:KLR), which was worth $16 million at the end of the fourth quarter. On the second spot was North Run Capital which amassed $15 million worth of shares. Portolan Capital Management, Greenhaven Road Investment Management, and Athanor Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position North Run Capital allocated the biggest weight to Kaleyra, Inc. (NASDAQ:KLR), around 11.09% of its 13F portfolio. Greenhaven Road Investment Management is also relatively very bullish on the stock, setting aside 1.87 percent of its 13F equity portfolio to KLR.
Consequently, key hedge funds were breaking ground themselves. Athanor Capital, managed by Parvinder Thiara, assembled the most outsized position in Kaleyra, Inc. (NASDAQ:KLR). Athanor Capital had $7.1 million invested in the company at the end of the quarter. Philip Hempleman’s Ardsley Partners also initiated a $3.5 million position during the quarter. The other funds with brand new KLR positions are Paul Marshall and Ian Wace’s Marshall Wace LLP, Jonathan Lourie and Stuart Fiertz’s Cheyne Capital, and Christopher Hillary’s Roubaix Capital.
Let’s now take a look at hedge fund activity in other stocks similar to Kaleyra, Inc. (NASDAQ:KLR). These stocks are Capital City Bank Group, Inc. (NASDAQ:CCBG), Greenwich LifeSciences, Inc. (NASDAQ:GLSI), Xunlei Ltd (NASDAQ:XNET), ClearPoint Neuro Inc. (NASDAQ:CLPT), Intrepid Potash, Inc. (NYSE:IPI), Daily Journal Corporation (NASDAQ:DJCO), and Tuscan Holdings Corp. (NASDAQ:THCB). All of these stocks’ market caps resemble KLR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CCBG | 4 | 7714 | -2 |
| GLSI | 2 | 906 | 1 |
| XNET | 7 | 5101 | -2 |
| CLPT | 6 | 20767 | -1 |
| IPI | 9 | 43300 | 5 |
| DJCO | 1 | 222 | -1 |
| THCB | 10 | 37164 | 2 |
| Average | 5.6 | 16453 | 0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.6 hedge funds with bullish positions and the average amount invested in these stocks was $16 million. That figure was $81 million in KLR’s case. Tuscan Holdings Corp. (NASDAQ:THCB) is the most popular stock in this table. On the other hand Daily Journal Corporation (NASDAQ:DJCO) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Kaleyra, Inc. (NASDAQ:KLR) is more popular among hedge funds. Our overall hedge fund sentiment score for KLR is 90. 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 28.5% in 2021 through July 23rd and still beat the market by 10.1 percentage points. Unfortunately KLR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on KLR were disappointed as the stock returned -22.6% since the end of the first quarter (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 since 2019.
Follow Kaleyra Inc. (NYSE:KLR)
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Disclosure: None. This article was originally published at Insider Monkey.
