What Hedge Funds Think about South Korean ADRs

#3 KT Corp (ADR) (NYSE:KT)

– Investors with long positions (as of March 31): 12

– Aggregate value of investors’ holdings (as of March 31): $44.16 million

Moving on, the ownership of KT Corp (ADR) (NYSE:KT) among funds tracked by Insider Monkey rose by 50% and the total value of holdings jumped by 227% during the first quarter. Among them, David E. Shaw‘s D.E. Shaw increased its stake in the company by 635% to 525,720 shares. Shares of the telecommunication company were on a gradual decline in the period between 2013 and 2015. However, they have changed their trajectory this year and are currently trading up by 28% year-to-date. Citing the discount at which the company had been trading, when compared to telecommunications companies in other geographies and the turnaround it has managed, several analysts have upgraded the stock in the past few months and the stock currently has a consensus ‘Buy’ rating among analysts covering it.

#2 POSCO (ADR) (NYSE:PKX)

– Investors with long positions (as of March 31): 13

– Aggregate value of investors’ holdings (as of March 31): $56.1 million

Amid a 33.85% rise in its stock during the first quarter, South Korea’s steel producer POSCO (ADR) (NYSE:PKX) saw a major jump in its ownership with the number of investors from our database that held shares of the company having jumped by five. However, the aggregate value of holdings in the company declined by 28%, mainly due to Martin Whitman‘s Third Avenue Management, which had been the second largest shareholder of POSCO (ADR) (NYSE:PKX) at the end of 2015 and sold the stake during the first three months of 2016. In the last few years, the company has made a major foray into lithium production, particularly in South America, which has been appreciated by both analysts and investors. It is currently working with Western Lithium to construct a new lithium plant in Argentina, which is expected to begin commercial production within a year.

#1 SK Telecom Co Ltd (ADR) (NYSE:SKM)

– Investors with long positions (as of March 31): 13

– Aggregate value of investors’ holdings (as of March 31): $105.85 million

With its ownership among funds covered by us increasing by five and the aggregate value of their holdings in it swelling by 61% during the first quarter, SK Telecom Co Ltd (ADR) (NYSE:SKM) emerged as the post popular South Korean stock among funds covered by us at the end of March. It was another stock in which Arrowstreet Capital initiated a stake during the first quarter, purchasing 773,054 shares and becoming its largest shareholder among the investors covered by us. Shares of SK Telecom Co Ltd (ADR) (NYSE:SKM) have advanced by over 13% since the beginning of the year and are currently trading at over 13 times forward earnings. In November last year, the company announced that it had signed a deal to acquire South Korea’s largest cable and Internet operator, CJ HelloVision, which would make it the second largest cable broadcaster in the country after KT Corp. However, this deal has come under intense scrutiny from regulators after competitors alleged that it would allow SK Telecom Co Ltd to unfairly dominate the industry. In its financial results for the second quarter, SK Telecom posted revenue of KRW 4,267 billion ($3.84 billion), almost flat on the year, while net income of KRW 291 billion ($261.66 million) slid by an annual 27%.

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