Is Kforce Inc. (NASDAQ:KFRC) the right pick for your portfolio? Money managers are becoming less hopeful. The number of bullish hedge fund positions stayed the same which is a slightly negative development in our experience
According to most investors, hedge funds are viewed as slow, old financial vehicles of the past. While there are more than 8000 funds with their doors open today, we hone in on the moguls of this group, about 450 funds. It is widely believed that this group controls most of the hedge fund industry’s total asset base, and by keeping an eye on their top picks, we have figured out a number of investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 24 percentage points in 7 months (see the details here).
Just as key, optimistic insider trading activity is another way to parse down the marketplace. As the old adage goes: there are many incentives for a corporate insider to drop shares of his or her company, but just one, very simple reason why they would buy. Many academic studies have demonstrated the impressive potential of this strategy if investors know where to look (learn more here).
Consequently, let’s take a peek at the key action regarding Kforce Inc. (NASDAQ:KFRC).
How have hedgies been trading Kforce Inc. (NASDAQ:KFRC)?
In preparation for this year, a total of 6 of the hedge funds we track were long in this stock, a change of 0% from the previous quarter. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings meaningfully.
Judging by the fact that Kforce Inc. (NASDAQ:KFRC) has faced falling interest from hedge fund managers, it’s easy to see that there was a specific group of money managers that decided to sell off their positions entirely in Q4. It’s worth mentioning that John Fichthorn’s Dialectic Capital Management sold off the biggest investment of the “upper crust” of funds we watch, valued at about $1.5 million in stock.. Ken Griffin’s fund, Citadel Investment Group, also cut its stock, about $0.4 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider trading activity in Kforce Inc. (NASDAQ:KFRC)
Insider buying is at its handiest when the company we’re looking at has experienced transactions within the past 180 days. Over the latest half-year time frame, Kforce Inc. (NASDAQ:KFRC) has experienced 1 unique insiders purchasing, and 12 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Kforce Inc. (NASDAQ:KFRC). These stocks are Trueblue Inc (NYSE:TBI), Compass Diversified Holdings (NYSE:CODI), AMN Healthcare Services, Inc. (NYSE:AHS), Kelly Services, Inc. (NASDAQ:KELYA), and DICE HOLDINGS, INC. (NYSE:DHX). This group of stocks belong to the staffing & outsourcing services industry and their market caps resemble KFRC’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Trueblue Inc (NYSE:TBI) | 7 | 0 | 10 |
| Compass Diversified Holdings (NYSE:CODI) | 5 | 7 | 0 |
| AMN Healthcare Services, Inc. (NYSE:AHS) | 15 | 1 | 8 |
| Kelly Services, Inc. (NASDAQ:KELYA) | 10 | 0 | 1 |
| DICE HOLDINGS, INC. (NYSE:DHX) | 8 | 0 | 2 |
With the results demonstrated by Insider Monkey’s time-tested strategies, everyday investors should always watch hedge fund and insider trading sentiment, and Kforce Inc. (NASDAQ:KFRC) is no exception.
