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Is Kforce Inc. (KFRC) A Good Stock To Buy?

The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Kforce Inc. (NASDAQ:KFRC) .

Kforce Inc. (NASDAQ:KFRC) was in 8 hedge funds’ portfolios at the end of September. KFRC shareholders have witnessed a decrease in hedge fund interest of late. There were 14 hedge funds in our database with KFRC holdings at the end of the previous quarter. At the end of this article we will also compare KFRC to other stocks including Kadant Inc. (NYSE:KAI), CytomX Therapeutics Inc (NASDAQ:CTMX), and Loxo Oncology Inc (NASDAQ:LOXO) to get a better sense of its popularity.

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We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.

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Now, we’re going to check out the key action encompassing Kforce Inc. (NASDAQ:KFRC).

How are hedge funds trading Kforce Inc. (NASDAQ:KFRC)?

At the end of the third quarter, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of -43% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards KFRC over the last 5 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).


According to Insider Monkey’s hedge fund database, Chuck Royce’s Royce & Associates has the number one position in Kforce Inc. (NASDAQ:KFRC), worth close to $8.2 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by Cliff Asness of AQR Capital Management, with a $5.9 million position; less than 0.1% of its 13F portfolio is allocated to the company. Some other peers that hold long positions encompass one of the largest hedge funds in the world, Renaissance Technologies, Bernard Horn’s Polaris Capital Management and Mark Coe’s Coe Capital Management. We should note that none of these elite funds are among our list of the 100 best performing elite funds which is based on the performance of their 13F long positions in non-microcap stocks.

Since Kforce Inc. (NASDAQ:KFRC) has witnessed a decline in interest from the entirety of the hedge funds we track, it’s safe to say that there exists a select few fund managers who were dropping their entire stakes heading into Q4. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management said goodbye to the largest position of the 700 funds studied by Insider Monkey, comprising an estimated $0.4 million in stock, and Joshua Packwood and Schuster Tanger’s Radix Partners was right behind this move, as the fund sold off about $0.3 million worth of shares.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Kforce Inc. (NASDAQ:KFRC) but similarly valued. We will take a look at Kadant Inc. (NYSE:KAI), CytomX Therapeutics Inc (NASDAQ:CTMX), Loxo Oncology Inc (NASDAQ:LOXO), and Modine Manufacturing Co. (NYSE:MOD). This group of stocks’ market valuations are closest to KFRC’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
KAI 13 57330 -2
CTMX 7 46621 -2
LOXO 11 224908 1
MOD 10 43734 -1

As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $93 million. That figure was $22 million in KFRC’s case. Kadant Inc. (NYSE:KAI) is the most popular stock in this table. On the other hand CytomX Therapeutics Inc (NASDAQ:CTMX) is the least popular one with only 7 bullish hedge fund positions. Kforce Inc. (NASDAQ:KFRC) 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. In this regard KAI might be a better candidate to consider taking a long position in.