Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of March. At Insider Monkey, we follow nearly 750 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Kennedy-Wilson Holdings Inc (NYSE:KW), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Kennedy-Wilson Holdings Inc (NYSE:KW) investors should be aware of an increase in activity from the world's largest hedge funds lately. Our calculations also showed that KW isn't among the 30 most popular stocks among hedge funds.
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 market by 40 percentage points since May 2014 through May 30, 2019 (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.
Let's view the fresh hedge fund action regarding Kennedy-Wilson Holdings Inc (NYSE:KW).
What have hedge funds been doing with Kennedy-Wilson Holdings Inc (NYSE:KW)?
At the end of the first quarter, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 8% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards KW over the last 15 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey's hedge fund database, Fairfax Financial Holdings, managed by Prem Watsa, holds the biggest position in Kennedy-Wilson Holdings Inc (NYSE:KW). Fairfax Financial Holdings has a $284.8 million position in the stock, comprising 11.8% of its 13F portfolio. The second most bullish fund manager is Elkhorn Partners, managed by Alan S. Parsow, which holds a $93.5 million position; 56.1% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions comprise Chuck Royce's Royce & Associates, Richard S. Meisenberg's ACK Asset Management and Eric Sprott's Sprott Asset Management.
Consequently, key hedge funds were breaking ground themselves. AQR Capital Management, managed by Cliff Asness, assembled the largest position in Kennedy-Wilson Holdings Inc (NYSE:KW). AQR Capital Management had $0.6 million invested in the company at the end of the quarter. Matthew Tewksbury's Stevens Capital Management also made a $0.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Jeffrey Talpins's Element Capital Management, Matthew Hulsizer's PEAK6 Capital Management, and Gavin Saitowitz and Cisco J. del Valle's Springbok Capital.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Kennedy-Wilson Holdings Inc (NYSE:KW) but similarly valued. These stocks are Core Laboratories N.V. (NYSE:CLB), RLJ Lodging Trust (NYSE:RLJ), Amicus Therapeutics, Inc. (NASDAQ:FOLD), and Tegna Inc (NYSE:TGNA). This group of stocks' market caps are closest to KW's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CLB,15,278565,0 RLJ,21,192850,-4 FOLD,30,1046575,4 TGNA,26,470360,4 Average,23,497088,1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $497 million. That figure was $504 million in KW's case. Amicus Therapeutics, Inc. (NASDAQ:FOLD) is the most popular stock in this table. On the other hand Core Laboratories N.V. (NYSE:CLB) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Kennedy-Wilson Holdings Inc (NYSE:KW) is even less popular than CLB. Hedge funds dodged a bullet by taking a bearish stance towards KW. Our calculations showed that the top 20 most popular hedge fund stocks returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately KW wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); KW investors were disappointed as the stock returned -0.5% during the same time frame and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in the second quarter.
Disclosure: None. This article was originally published at Insider Monkey.