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The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 817 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of September 30th, 2020. What do these smart investors think about Kemper Corporation (NYSE:KMPR)?
Is KMPR a good stock to buy now? Kemper Corporation (NYSE:KMPR) was in 18 hedge funds' portfolios at the end of September. The all time high for this statistic is 21. KMPR investors should pay attention to an increase in hedge fund interest lately. There were 16 hedge funds in our database with KMPR holdings at the end of June. Our calculations also showed that KMPR isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
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 monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Paul Marshall of Marshall Wace
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. Now let's analyze the fresh hedge fund action surrounding Kemper Corporation (NYSE:KMPR).
Do Hedge Funds Think KMPR Is A Good Stock To Buy Now?
At the end of September, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards KMPR over the last 21 quarters. With hedge funds' sentiment swirling, there exists a select group of key hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Millennium Management, managed by Israel Englander, holds the largest position in Kemper Corporation (NYSE:KMPR). Millennium Management has a $13.9 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Royce & Associates, managed by Chuck Royce, which holds a $6.7 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers with similar optimism consist of John D. Gillespie's Prospector Partners, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital and Renaissance Technologies. In terms of the portfolio weights assigned to each position Prospector Partners allocated the biggest weight to Kemper Corporation (NYSE:KMPR), around 0.62% of its 13F portfolio. 12th Street Asset Management is also relatively very bullish on the stock, dishing out 0.3 percent of its 13F equity portfolio to KMPR.
As aggregate interest increased, key money managers have jumped into Kemper Corporation (NYSE:KMPR) headfirst. Citadel Investment Group, managed by Ken Griffin, created the biggest position in Kemper Corporation (NYSE:KMPR). Citadel Investment Group had $1.4 million invested in the company at the end of the quarter. Greg Eisner's Engineers Gate Manager also made a $0.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace's Marshall Wace LLP, Paul Tudor Jones's Tudor Investment Corp, and Jinghua Yan's TwinBeech Capital.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Kemper Corporation (NYSE:KMPR) but similarly valued. These stocks are Vir Biotechnology, Inc. (NASDAQ:VIR), Plains All American Pipeline, L.P. (NYSE:PAA), Everbridge, Inc. (NASDAQ:EVBG), Advanced Drainage Systems Inc. (NYSE:WMS), Mercury Systems Inc (NASDAQ:MRCY), Tapestry, Inc. (NYSE:TPR), and Navistar International Corp (NYSE:NAV). All of these stocks' market caps are closest to KMPR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VIR,6,14806,-1 PAA,8,38690,-1 EVBG,30,980449,-13 WMS,25,713522,1 MRCY,19,58220,-7 TPR,39,670797,0 NAV,43,2102650,10 Average,24.3,654162,-1.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.3 hedge funds with bullish positions and the average amount invested in these stocks was $654 million. That figure was $42 million in KMPR's case. Navistar International Corp (NYSE:NAV) is the most popular stock in this table. On the other hand Vir Biotechnology, Inc. (NASDAQ:VIR) is the least popular one with only 6 bullish hedge fund positions. Kemper Corporation (NYSE:KMPR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for KMPR is 48.9. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on KMPR as the stock returned 15.5% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.