Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Kimball Electronics Inc (NASDAQ:KE).
Is KE a good stock to buy now? The best stock pickers were taking an optimistic view. The number of bullish hedge fund positions rose by 1 recently. Kimball Electronics Inc (NASDAQ:KE) was in 13 hedge funds’ portfolios at the end of September. The all time high for this statistic is 13. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that KE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 12 hedge funds in our database with KE holdings at the end of June.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 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 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. Now let’s review the new hedge fund action surrounding Kimball Electronics Inc (NASDAQ:KE).
Do Hedge Funds Think KE Is A Good Stock To Buy Now?
At third quarter’s end, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of 8% from the previous quarter. The graph below displays the number of hedge funds with bullish position in KE over the last 21 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Royce & Associates was the largest shareholder of Kimball Electronics Inc (NASDAQ:KE), with a stake worth $8.5 million reported as of the end of September. Trailing Royce & Associates was Renaissance Technologies, which amassed a stake valued at $4.9 million. Arrowstreet Capital, Ancora Advisors, and Millennium Management 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 Royce & Associates allocated the biggest weight to Kimball Electronics Inc (NASDAQ:KE), around 0.09% of its 13F portfolio. Ancora Advisors is also relatively very bullish on the stock, designating 0.05 percent of its 13F equity portfolio to KE.
Now, specific money managers have jumped into Kimball Electronics Inc (NASDAQ:KE) headfirst. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the biggest position in Kimball Electronics Inc (NASDAQ:KE). Marshall Wace LLP had $0.1 million invested in the company at the end of the quarter. Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital) also made a $0 million investment in the stock during the quarter.
Let’s check out hedge fund activity in other stocks similar to Kimball Electronics Inc (NASDAQ:KE). These stocks are Casper Sleep Inc. (NYSE:CSPR), Genco Shipping & Trading Limited (NYSE:GNK), CURO Group Holdings Corp. (NYSE:CURO), Cheetah Mobile Inc (NYSE:CMCM), MidWestOne Financial Group, Inc. (NASDAQ:MOFG), SCVX Corp. (NYSE:SCVX), and Solaris Oilfield Infrastructure, Inc. (NYSE:SOI). All of these stocks’ market caps are closest to KE’s market cap.
|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 10.3 hedge funds with bullish positions and the average amount invested in these stocks was $41 million. That figure was $19 million in KE’s case. SCVX Corp. (NYSE:SCVX) is the most popular stock in this table. On the other hand Cheetah Mobile Inc (NYSE:CMCM) is the least popular one with only 4 bullish hedge fund positions. Kimball Electronics Inc (NASDAQ:KE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for KE is 70.6. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. Hedge funds were also right about betting on KE as the stock returned 38.1% since the end of Q3 (through 12/8) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.