Is Kandi Technologies Group, Inc. (KNDI) A Good Stock To Buy?

We are still in an overall bull market and many stocks that smart money investors were piling into surged through November 22nd. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 52% and 49% respectively. Hedge funds’ top 3 stock picks returned 39.1% this year and beat the S&P 500 ETFs by nearly 13 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Kandi Technologies Group, Inc. (NASDAQ:KNDI).

Kandi Technologies Group, Inc. (NASDAQ:KNDI) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 3 hedge funds’ portfolios at the end of September. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Superior Group of Companies, Inc. (NASDAQ:SGC), Orrstown Financial Services, Inc. (NASDAQ:ORRF), and Rocky Brands, Inc. (NASDAQ:RCKY) to gather more data points. Our calculations also showed that KNDI isn’t among the 30 most popular stocks among hedge funds.

At the moment there are many tools shareholders use to assess publicly traded companies. Some of the most under-the-radar tools are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the best picks of the top money managers can outpace the broader indices by a very impressive amount (see the details here).

Millennium Management, Catapult Capital Management

Israel Englander of Millennium Management

Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a gander at the recent hedge fund action encompassing Kandi Technologies Group, Inc. (NASDAQ:KNDI).

What have hedge funds been doing with Kandi Technologies Group, Inc. (NASDAQ:KNDI)?

Heading into the fourth quarter of 2019, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards KNDI over the last 17 quarters. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

No of Hedge Funds with KNDI Positions

The largest stake in Kandi Technologies Group, Inc. (NASDAQ:KNDI) was held by Sculptor Capital, which reported holding $1.3 million worth of stock at the end of September. It was followed by Millennium Management with a $0.3 million position. The only other hedge fund that is bullish on the company was Citadel Investment Group.

Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.

Let’s check out hedge fund activity in other stocks similar to Kandi Technologies Group, Inc. (NASDAQ:KNDI). We will take a look at Superior Group of Companies, Inc. (NASDAQ:SGC), Orrstown Financial Services, Inc. (NASDAQ:ORRF), Rocky Brands, Inc. (NASDAQ:RCKY), and CECO Environmental Corp. (NASDAQ:CECE). This group of stocks’ market values are similar to KNDI’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SGC 3 4052 1
ORRF 3 10791 0
RCKY 6 18964 -1
CECE 9 44549 -3
Average 5.25 19589 -0.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 5.25 hedge funds with bullish positions and the average amount invested in these stocks was $20 million. That figure was $2 million in KNDI’s case. CECO Environmental Corp. (NASDAQ:CECE) is the most popular stock in this table. On the other hand Superior Group of Companies, Inc. (NASDAQ:SGC) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Kandi Technologies Group, Inc. (NASDAQ:KNDI) is even less popular than SGC. Hedge funds dodged a bullet by taking a bearish stance towards KNDI. Our calculations showed that the top 20 most popular hedge fund stocks returned 34.7% in 2019 through November 22nd and outperformed the S&P 500 ETF (SPY) by 8.5 percentage points. Unfortunately KNDI wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); KNDI investors were disappointed as the stock returned 4.3% during the fourth quarter (through 11/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market so far in Q4.

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