At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Kewaunee Scientific Corporation (NASDAQ:KEQU).
Kewaunee Scientific Corporation (NASDAQ:KEQU) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 3 hedge funds’ portfolios at the end of September. Our calculations also showed that KEQU 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). 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 Acorda Therapeutics Inc (NASDAQ:ACOR), Aptevo Therapeutics Inc. (NASDAQ:APVO), and Abraxas Petroleum Corp. (NASDAQ:AXAS) to gather more data points.
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 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 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.
J. Carlo Cannell of Cannell Capital
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 10 most profitable companies in the world 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 we’re going to take a look at the recent hedge fund action surrounding Kewaunee Scientific Corporation (NASDAQ:KEQU).
How have hedgies been trading Kewaunee Scientific Corporation (NASDAQ:KEQU)?
At the end of the third quarter, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards KEQU over the last 21 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Kewaunee Scientific Corporation (NASDAQ:KEQU), with a stake worth $1 million reported as of the end of September. Trailing Renaissance Technologies was Minerva Advisors, which amassed a stake valued at $0.9 million. Cannell Capital was 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 Minerva Advisors allocated the biggest weight to Kewaunee Scientific Corporation (NASDAQ:KEQU), around 0.58% of its 13F portfolio. Cannell Capital is also relatively very bullish on the stock, setting aside 0.02 percent of its 13F equity portfolio to KEQU.
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 go over hedge fund activity in other stocks similar to Kewaunee Scientific Corporation (NASDAQ:KEQU). We will take a look at Acorda Therapeutics Inc (NASDAQ:ACOR), Aptevo Therapeutics Inc. (NASDAQ:APVO), Abraxas Petroleum Corp. (NASDAQ:AXAS), Alimera Sciences Inc (NASDAQ:ALIM), Salem Media Group Inc. (NASDAQ:SALM), Psychemedics Corp. (NASDAQ:PMD), and J. Jill, Inc. (NYSE:JILL). This group of stocks’ market caps resemble KEQU’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ACOR | 7 | 3257 | -6 |
| APVO | 2 | 2315 | -2 |
| AXAS | 5 | 194 | -5 |
| ALIM | 6 | 4298 | 1 |
| SALM | 2 | 424 | 0 |
| PMD | 4 | 3002 | 0 |
| JILL | 3 | 795 | -5 |
| Average | 4.1 | 2041 | -2.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 4.1 hedge funds with bullish positions and the average amount invested in these stocks was $2 million. That figure was $2 million in KEQU’s case. Acorda Therapeutics Inc (NASDAQ:ACOR) is the most popular stock in this table. On the other hand Aptevo Therapeutics Inc. (NASDAQ:APVO) is the least popular one with only 2 bullish hedge fund positions. Kewaunee Scientific Corporation (NASDAQ:KEQU) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for KEQU is 45. 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. 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 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 28.1% in 2020 through November 23rd and surpassed the market again by 15.4 percentage points. Unfortunately KEQU wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); KEQU investors were disappointed as the stock returned 2.8% since the end of September (through 11/23) 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 most of these stocks already outperformed the market in 2020.
Follow Kewaunee Scientific Corp (NASDAQ:KEQU)
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Disclosure: None. This article was originally published at Insider Monkey.
