Is Kinsale Capital Group, Inc. (NASDAQ:KNSL) a good equity to bet on right now? We like to check what the smart money thinks first before doing extensive research. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to find the winners in the stock market.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Let's take a peek at the recent hedge fund action regarding Kinsale Capital Group, Inc. (NASDAQ:KNSL).
What does the smart money think about Kinsale Capital Group, Inc. (NASDAQ:KNSL)?
At Q4's end, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 140% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards KNSL over the last 14 quarters. With hedge funds' capital changing hands, there exists a few key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Driehaus Capital, managed by Richard Driehaus, holds the most valuable position in Kinsale Capital Group, Inc. (NASDAQ:KNSL). Driehaus Capital has a $5.9 million position in the stock, comprising 0.3% of its 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $5.8 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other professional money managers that hold long positions include Paul Marshall and Ian Wace's Marshall Wace LLP, Cliff Asness's AQR Capital Management and Jim Simons's Renaissance Technologies.
As industrywide interest jumped, key hedge funds have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, established the most valuable position in Kinsale Capital Group, Inc. (NASDAQ:KNSL). Citadel Investment Group had $5.8 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace's Marshall Wace LLP also made a $2.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Jim Simons's Renaissance Technologies, D. E. Shaw's D E Shaw, and Israel Englander's Millennium Management.
Let's go over hedge fund activity in other stocks similar to Kinsale Capital Group, Inc. (NASDAQ:KNSL). We will take a look at TransAlta Corporation (NYSE:TAC), IMAX Corporation (NYSE:IMAX), Nevro Corp (NYSE:NVRO), and Sangamo Therapeutics, Inc. (NASDAQ:SGMO). All of these stocks' market caps are closest to KNSL's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TAC,9,12805,0 IMAX,14,28137,0 NVRO,20,296016,-4 SGMO,23,79711,-3 Average,16.5,104167,-1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.5 hedge funds with bullish positions and the average amount invested in these stocks was $104 million. That figure was $19 million in KNSL's case. Sangamo Therapeutics, Inc. (NASDAQ:SGMO) is the most popular stock in this table. On the other hand TransAlta Corporation (NYSE:TAC) is the least popular one with only 9 bullish hedge fund positions. Kinsale Capital Group, Inc. (NASDAQ:KNSL) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. A small number of hedge funds were also right about betting on KNSL as the stock returned 25.5% and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.