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. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Kohl’s Corporation (NYSE:KSS).
Kohl’s Corporation (NYSE:KSS) investors should be aware of a decrease in hedge fund sentiment in recent months. Our calculations also showed that KSS 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.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. 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. Now we’re going to analyze the recent hedge fund action surrounding Kohl’s Corporation (NYSE:KSS).
Hedge fund activity in Kohl’s Corporation (NYSE:KSS)
At the end of the first quarter, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -7% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards KSS over the last 18 quarters. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Renaissance Technologies has the most valuable position in Kohl’s Corporation (NYSE:KSS), worth close to $41.3 million, amounting to less than 0.1%% of its total 13F portfolio. The second largest stake is held by Cliff Asness of AQR Capital Management, with a $22.4 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that are bullish include John Overdeck and David Siegel’s Two Sigma Advisors, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Prentice Capital Management allocated the biggest weight to Kohl’s Corporation (NYSE:KSS), around 2.17% of its 13F portfolio. Neo Ivy Capital is also relatively very bullish on the stock, earmarking 0.28 percent of its 13F equity portfolio to KSS.
Judging by the fact that Kohl’s Corporation (NYSE:KSS) has experienced bearish sentiment from hedge fund managers, logic holds that there was a specific group of money managers who sold off their full holdings last quarter. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management cut the biggest stake of all the hedgies monitored by Insider Monkey, worth an estimated $53.7 million in stock. Lee Ainslie’s fund, Maverick Capital, also cut its stock, about $12.9 million worth. These transactions are interesting, as total hedge fund interest was cut by 2 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Kohl’s Corporation (NYSE:KSS). We will take a look at UMB Financial Corporation (NASDAQ:UMBF), Alkermes Plc (NASDAQ:ALKS), Teradata Corporation (NYSE:TDC), and MGE Energy, Inc. (NASDAQ:MGEE). This group of stocks’ market values match KSS’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.75 hedge funds with bullish positions and the average amount invested in these stocks was $192 million. That figure was $145 million in KSS’s case. Alkermes Plc (NASDAQ:ALKS) is the most popular stock in this table. On the other hand MGE Energy, Inc. (NASDAQ:MGEE) is the least popular one with only 6 bullish hedge fund positions. Kohl’s Corporation (NYSE:KSS) is not the most popular stock in this group but hedge fund interest is still above average. 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 8.3% in 2020 through the end of May but still beat the market by 13.2 percentage points. Hedge funds were also right about betting on KSS as the stock returned 31.7% in Q2 (through the end of May) 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.