Hedge Funds Are Dumping KB Financial Group, Inc. (ADR) (KB)

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KB Financial Group, Inc. (ADR) (NYSE:KB) investors should be aware of a decrease in hedge fund sentiment of late.

In the eyes of most market participants, hedge funds are viewed as underperforming, outdated financial vehicles of yesteryear. While there are over 8000 funds trading at the moment, we hone in on the masters of this group, around 450 funds. It is widely believed that this group has its hands on most of all hedge funds’ total capital, and by monitoring their top investments, we have discovered a few investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year 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 outpaced the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

David Dreman

Just as beneficial, bullish insider trading sentiment is a second way to parse down the world of equities. There are lots of reasons for an insider to drop shares of his or her company, but only one, very simple reason why they would initiate a purchase. Many academic studies have demonstrated the useful potential of this method if “monkeys” understand what to do (learn more here).

Consequently, we’re going to take a look at the recent action regarding KB Financial Group, Inc. (ADR) (NYSE:KB).

What does the smart money think about KB Financial Group, Inc. (ADR) (NYSE:KB)?

In preparation for this quarter, a total of 9 of the hedge funds we track were bullish in this stock, a change of -10% from one quarter earlier. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were boosting their stakes considerably.

Of the funds we track, David Dreman’s Dreman Value Management had the most valuable position in KB Financial Group, Inc. (ADR) (NYSE:KB), worth close to $5.1 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by Citadel Investment Group, managed by Ken Griffin, which held a $3.6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Jim Simons’s Renaissance Technologies, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Mike Vranos’s Ellington.

Due to the fact that KB Financial Group, Inc. (ADR) (NYSE:KB) has witnessed falling interest from the entirety of the hedge funds we track, it’s easy to see that there is a sect of money managers that elected to cut their entire stakes in Q1. It’s worth mentioning that Louis Bacon’s Moore Global Investments cut the largest investment of the 450+ funds we track, totaling about $1.7 million in stock., and Bruce Kovner of Caxton Associates LP was right behind this move, as the fund cut about $0.4 million worth. These transactions are important to note, as total hedge fund interest dropped by 1 funds in Q1.

What have insiders been doing with KB Financial Group, Inc. (ADR) (NYSE:KB)?

Insider buying is at its handiest when the company in focus has experienced transactions within the past half-year. Over the last 180-day time frame, KB Financial Group, Inc. (ADR) (NYSE:KB) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to KB Financial Group, Inc. (ADR) (NYSE:KB). These stocks are ICICI Bank Limited (ADR) (NYSE:IBN), Woori Finance Holdings Co., Ltd. (ADR) (NYSE:WF), Shinhan Financial Group Co., Ltd. (ADR) (NYSE:SHG), Banco de Chile (ADR) (NYSE:BCH), and Bancolombia S.A. (ADR) (NYSE:CIB). This group of stocks are the members of the foreign regional banks industry and their market caps resemble KB’s market cap.

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