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Kforce Inc. (KFRC): Are Hedge Funds Right About This Stock?

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Now, according to many of your peers, hedge funds are seen as overrated, old investment vehicles of an era lost to time. Although there are over 8,000 hedge funds in operation today, this site looks at the elite of this group, about 525 funds. Analysts calculate that this group controls most of all hedge funds’ total capital, and by watching their best investments, we’ve figured out a number of investment strategies that have historically outpaced the S&P 500. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).

Kforce Inc. (NASDAQ:KFRC)

Just as necessary, bullish insider trading activity is another way to analyze the investments you’re interested in. As the old adage goes: there are plenty of reasons for an upper level exec to drop shares of his or her company, but just one, very clear reason why they would initiate a purchase. Several empirical studies have demonstrated the valuable potential of this strategy if shareholders understand what to do (learn more here).

Thus, it’s important to analyze the newest info for Kforce Inc. (NASDAQ:KFRC).

What does the smart money think about Kforce Inc. (NASDAQ:KFRC)?

At Q2’s end, a total of 6 of the hedge funds we track were long in this stock, a change of -25% from the first quarter. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes substantially.

When using filings from the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the largest position in Kforce Inc. (NASDAQ:KFRC). Royce & Associates has a $12.1 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Cliff Asness of AQR Capital Management, with a $6.7 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include Joel Greenblatt’s Gotham Asset Management, Mike Vranos’s Ellington and Jim Simons’s Renaissance Technologies.

Since Kforce Inc. (NASDAQ:KFRC) has witnessed bearish sentiment from the top-tier hedge fund industry, it’s easy to see that there lies a certain “tier” of hedge funds who sold off their positions entirely heading into Q2. At the top of the heap, Israel Englander’s Millennium Management dumped the largest investment of the “upper crust” of funds we monitor, comprising close to $2.1 million in stock. John Overdeck and David Siegel’s fund, Two Sigma Advisors, also said goodbye to its stock, about $0.8 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 2 funds heading into Q2.

How are insiders trading Kforce Inc. (NASDAQ:KFRC)?

Legal insider trading, particularly when it’s bullish, is most useful when the company in question has seen transactions within the past half-year. Over the last half-year time period, Kforce Inc. (NASDAQ:KFRC) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators 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 are closest to KFRC’s market cap.

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