In this article you are going to find out whether hedge funds think Kennedy-Wilson Holdings Inc (NYSE:KW) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Kennedy-Wilson Holdings Inc (NYSE:KW) has seen an increase in support from the world’s most elite money managers in recent months. Our calculations also showed that KW isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a peek at the fresh hedge fund action regarding Kennedy-Wilson Holdings Inc (NYSE:KW).
Hedge fund activity in Kennedy-Wilson Holdings Inc (NYSE:KW)
At Q1’s end, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 29% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in KW over the last 18 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Fairfax Financial Holdings, managed by Prem Watsa, holds the largest position in Kennedy-Wilson Holdings Inc (NYSE:KW). Fairfax Financial Holdings has a $178 million position in the stock, comprising 12.3% of its 13F portfolio. Sitting at the No. 2 spot is Elkhorn Partners, led by Alan S. Parsow, holding a $58.5 million position; the fund has 48.6% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish encompass Chuck Royce’s Royce & Associates, Eric Sprott’s Sprott Asset Management and Richard S. Meisenberg’s ACK Asset Management. In terms of the portfolio weights assigned to each position Elkhorn Partners allocated the biggest weight to Kennedy-Wilson Holdings Inc (NYSE:KW), around 48.58% of its 13F portfolio. Fairfax Financial Holdings is also relatively very bullish on the stock, designating 12.32 percent of its 13F equity portfolio to KW.
As aggregate interest increased, key money managers were breaking ground themselves. ACK Asset Management, managed by Richard S. Meisenberg, initiated the most outsized position in Kennedy-Wilson Holdings Inc (NYSE:KW). ACK Asset Management had $6.7 million invested in the company at the end of the quarter. Greg Eisner’s Engineers Gate Manager also made a $0.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Dmitry Balyasny’s Balyasny Asset Management, Charles Paquelet’s Skylands Capital, and Brandon Haley’s Holocene Advisors.
Let’s check out hedge fund activity in other stocks similar to Kennedy-Wilson Holdings Inc (NYSE:KW). These stocks are Acushnet Holdings Corp. (NYSE:GOLF), Park Hotels & Resorts Inc. (NYSE:PK), IBERIABANK Corporation (NASDAQ:IBKC), and Frontline Ltd (NYSE:FRO). This group of stocks’ market values are similar to KW’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GOLF | 12 | 14131 | -4 |
| PK | 26 | 162562 | 13 |
| IBKC | 30 | 129219 | -2 |
| FRO | 24 | 116530 | 7 |
| Average | 23 | 105611 | 3.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $106 million. That figure was $308 million in KW’s case. IBERIABANK Corporation (NASDAQ:IBKC) is the most popular stock in this table. On the other hand Acushnet Holdings Corp. (NYSE:GOLF) is the least popular one with only 12 bullish hedge fund positions. Kennedy-Wilson Holdings Inc (NYSE:KW) is not the least popular stock in this group but hedge fund interest is still below average. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th and surpassed the market by 14.2 percentage points. Unfortunately KW wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); KW investors were disappointed as the stock returned 23.4% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Follow Kennedy-Wilson Holdings Inc. (NYSE:KW)
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Disclosure: None. This article was originally published at Insider Monkey.
