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Is Kennedy-Wilson Holdings Inc (KW) Going to Burn These Hedge Funds?

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. We at Insider Monkey have plowed through 752 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article we look at what those investors think of Kennedy-Wilson Holdings Inc (NYSE:KW).

Is Kennedy-Wilson Holdings Inc (NYSE:KW) an excellent investment today? Investors who are in the know are becoming hopeful. The number of bullish hedge fund bets moved up by 5 lately. Our calculations also showed that KW isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

According to most stock holders, hedge funds are seen as unimportant, outdated financial vehicles of the past. While there are over 8000 funds in operation at present, Our researchers hone in on the bigwigs of this group, about 750 funds. These investment experts shepherd the majority of the smart money’s total asset base, and by shadowing their first-class equity investments, Insider Monkey has discovered many investment strategies that have historically exceeded the market. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .

Prem Watsa of Fairfax Financial Holdings

We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s analyze the latest hedge fund action encompassing Kennedy-Wilson Holdings Inc (NYSE:KW).

What have hedge funds been doing with Kennedy-Wilson Holdings Inc (NYSE:KW)?

At the end of the third quarter, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 38% from the second quarter of 2019. On the other hand, there were a total of 12 hedge funds with a bullish position in KW a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Kennedy-Wilson Holdings Inc (NYSE:KW) was held by Fairfax Financial Holdings, which reported holding $291.9 million worth of stock at the end of September. It was followed by Elkhorn Partners with a $95.1 million position. Other investors bullish on the company included Royce & Associates, Sprott Asset Management, and 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 55.67% of its 13F portfolio. Fairfax Financial Holdings is also relatively very bullish on the stock, designating 13.47 percent of its 13F equity portfolio to KW.

Consequently, some big names have jumped into Kennedy-Wilson Holdings Inc (NYSE:KW) headfirst. Vertex One Asset Management, managed by John Thiessen, assembled the biggest position in Kennedy-Wilson Holdings Inc (NYSE:KW). Vertex One Asset Management had $0.8 million invested in the company at the end of the quarter. Brandon Haley’s Holocene Advisors also made a $0.4 million investment in the stock during the quarter. The other funds with new positions in the stock are David Harding’s Winton Capital Management, Matthew Hulsizer’s PEAK6 Capital Management, and Matthew Hulsizer’s PEAK6 Capital Management.

Let’s check out hedge fund activity in other stocks similar to Kennedy-Wilson Holdings Inc (NYSE:KW). We will take a look at Thor Industries, Inc. (NYSE:THO), Cirrus Logic, Inc. (NASDAQ:CRUS), Liberty Latin America Ltd. (NASDAQ:LILA), and Simpson Manufacturing Co, Inc. (NYSE:SSD). This group of stocks’ market values are closest to KW’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
THO 24 222357 5
CRUS 24 373257 1
LILA 13 154267 2
SSD 13 215110 -4
Average 18.5 241248 1

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.5 hedge funds with bullish positions and the average amount invested in these stocks was $241 million. That figure was $499 million in KW’s case. Thor Industries, Inc. (NYSE:THO) is the most popular stock in this table. On the other hand Liberty Latin America Ltd. (NASDAQ:LILA) is the least popular one with only 13 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 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately KW wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); KW investors were disappointed as the stock returned 3.1% during the first two months of the fourth 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 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.

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

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