Hedge Funds Are Crazy About Kornit Digital Ltd. (KRNT)

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 at Insider Monkey have plowed through 866 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article we look at what those investors think of Kornit Digital Ltd. (NASDAQ:KRNT).

Is Kornit Digital Ltd. (NASDAQ:KRNT) an exceptional investment right now? The best stock pickers were getting more bullish. The number of long hedge fund positions advanced by 9 recently. Kornit Digital Ltd. (NASDAQ:KRNT) was in 24 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 18. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that KRNT isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 15 hedge funds in our database with KRNT positions at the end of the fourth quarter.

In the financial world there are a lot of methods investors use to appraise publicly traded companies. A couple of the most under-the-radar methods are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the best hedge fund managers can outpace the S&P 500 by a significant margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Peter Rathjens Arrowstreet Capital 394

Peter Rathjens of Arrowstreet Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. 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 peek at the fresh hedge fund action encompassing Kornit Digital Ltd. (NASDAQ:KRNT).

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

At the end of the first quarter, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 60% from the previous quarter. On the other hand, there were a total of 9 hedge funds with a bullish position in KRNT a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

More specifically, Noked Capital was the largest shareholder of Kornit Digital Ltd. (NASDAQ:KRNT), with a stake worth $22.1 million reported as of the end of March. Trailing Noked Capital was Driehaus Capital, which amassed a stake valued at $19 million. Intrinsic Edge Capital, G2 Investment Partners Management, and Sphera Global Healthcare Fund were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Noked Capital allocated the biggest weight to Kornit Digital Ltd. (NASDAQ:KRNT), around 7.2% of its 13F portfolio. G2 Investment Partners Management is also relatively very bullish on the stock, earmarking 2.36 percent of its 13F equity portfolio to KRNT.

As aggregate interest increased, key money managers have been driving this bullishness. Renaissance Technologies, assembled the most valuable position in Kornit Digital Ltd. (NASDAQ:KRNT). Renaissance Technologies had $10.2 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $8.7 million position during the quarter. The other funds with brand new KRNT positions are Catherine D. Wood’s ARK Investment Management, Paul Marshall and Ian Wace’s Marshall Wace LLP, and John Overdeck and David Siegel’s Two Sigma Advisors.

Let’s check out hedge fund activity in other stocks similar to Kornit Digital Ltd. (NASDAQ:KRNT). We will take a look at National Beverage Corp. (NASDAQ:FIZZ), Blackstone Mortgage Trust Inc (NYSE:BXMT), National Fuel Gas Company (NYSE:NFG), Asana Inc. (NYSE:ASAN), ShockWave Medical, Inc. (NASDAQ:SWAV), Allison Transmission Holdings Inc (NYSE:ALSN), and The Wendy’s Company (NASDAQ:WEN). All of these stocks’ market caps are closest to KRNT’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FIZZ 15 258478 -6
BXMT 16 209515 -1
NFG 16 92712 3
ASAN 22 374549 4
SWAV 17 219798 -5
ALSN 30 498494 5
WEN 26 1018985 -5
Average 20.3 381790 -0.7

View table here if you experience formatting issues.

As you can see these stocks had an average of 20.3 hedge funds with bullish positions and the average amount invested in these stocks was $382 million. That figure was $154 million in KRNT’s case. Allison Transmission Holdings Inc (NYSE:ALSN) is the most popular stock in this table. On the other hand National Beverage Corp. (NASDAQ:FIZZ) is the least popular one with only 15 bullish hedge fund positions. Kornit Digital Ltd. (NASDAQ:KRNT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for KRNT is 70. 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 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 23.8% in 2021 through July 16th and still beat the market by 7.7 percentage points. Hedge funds were also right about betting on KRNT as the stock returned 18.3% since the end of Q1 (through 7/16) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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