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Is ZK International Group Co., Ltd. (ZKIN) A Good Stock To Buy?

·5 min read

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. We have processed the filings of the more than 866 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31st holdings, data that is available nowhere else. Should you consider ZK International Group Co., Ltd. (NASDAQ:ZKIN) for your portfolio? We'll look to this invaluable collective wisdom for the answer.

Is ZKIN a good stock to buy? The best stock pickers were turning bullish. The number of bullish hedge fund bets increased by 2 recently. ZK International Group Co., Ltd. (NASDAQ:ZKIN) was in 3 hedge funds' portfolios at the end of March. The all time high for this statistic is 1. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ZKIN isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 1 hedge funds in our database with ZKIN positions at the end of the fourth quarter.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

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At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Now let's take a look at the recent hedge fund action surrounding ZK International Group Co., Ltd. (NASDAQ:ZKIN).

Do Hedge Funds Think ZKIN Is A Good Stock To Buy Now?

At the end of March, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 200% from the fourth quarter of 2020. On the other hand, there were a total of 1 hedge funds with a bullish position in ZKIN a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in ZK International Group Co., Ltd. (NASDAQ:ZKIN) was held by Renaissance Technologies, which reported holding $0.6 million worth of stock at the end of December. It was followed by Citadel Investment Group with a $0.2 million position. The only other hedge fund that is bullish on the company was Engineers Gate Manager.

As aggregate interest increased, specific money managers have jumped into ZK International Group Co., Ltd. (NASDAQ:ZKIN) headfirst. Citadel Investment Group, managed by Ken Griffin, assembled the most valuable position in ZK International Group Co., Ltd. (NASDAQ:ZKIN). Citadel Investment Group had $0.2 million invested in the company at the end of the quarter. Greg Eisner's Engineers Gate Manager also made a $0.2 million investment in the stock during the quarter.

Let's now review hedge fund activity in other stocks similar to ZK International Group Co., Ltd. (NASDAQ:ZKIN). These stocks are Onconova Therapeutics, Inc. (NASDAQ:ONTX), MICT, Inc. (NASDAQ:MICT), Checkpoint Therapeutics, Inc. (NASDAQ:CKPT), BCB Bancorp, Inc. (NASDAQ:BCBP), FVCBankcorp, Inc. (NASDAQ:FVCB), SLR Senior Investment Corp. (NASDAQ:SUNS), and Franklin Wireless Corp. (NASDAQ:FKWL). This group of stocks' market caps resemble ZKIN's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ONTX,10,8984,9 MICT,3,2125,-3 CKPT,7,10847,3 BCBP,3,21333,-1 FVCB,3,5130,0 SUNS,3,2228,0 FKWL,2,15745,2 Average,4.4,9485,1.4 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 4.4 hedge funds with bullish positions and the average amount invested in these stocks was $9 million. That figure was $1 million in ZKIN's case. Onconova Therapeutics, Inc. (NASDAQ:ONTX) is the most popular stock in this table. On the other hand Franklin Wireless Corp. (NASDAQ:FKWL) is the least popular one with only 2 bullish hedge fund positions. ZK International Group Co., Ltd. (NASDAQ:ZKIN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ZKIN is 43.3. 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. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. 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 17.2% in 2021 through June 11th and surpassed the market again by 3.3 percentage points. Unfortunately ZKIN wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); ZKIN investors were disappointed as the stock returned -46% since the end of March (through 6/11) 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 in 2021.

Disclosure: None. This article was originally published at Insider Monkey.

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