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Is KKR & Co. L.P. (KKR) Going to Burn These Hedge Funds?

Due to the fact that KKR & Co. L.P. (NYSE:KKR) has experienced declining sentiment from hedge fund managers, we can see that there exists a select few fund managers that slashed their entire stakes heading into Q4. At the top of the heap, Eric Halet and Davide Serra’s Algebris Investments dropped the biggest investment of all the hedgies monitored by Insider Monkey, worth about $11.1 million in stock, and Dmitry Balyasny’s Balyasny Asset Management was right behind this move, as the fund dumped about $6.4 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as KKR & Co. L.P. (NYSE:KKR) but similarly valued. These stocks are Mylan N.V. (NASDAQ:MYL), Ross Stores, Inc. (NASDAQ:ROST), CRH PLC (ADR) (NYSE:CRH), and Charter Communications, Inc. (NASDAQ:CHTR). This group of stocks’ market values resemble KKR’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MYL 74 2843316 -18
ROST 40 908863 5
CRH 7 12060 4
CHTR 87 11260104 -9

As you can see these stocks had an average of 52 hedge funds with bullish positions and the average amount invested in these stocks was $3756 million. That figure was $581 million in KKR’s case. Charter Communications, Inc. (NASDAQ:CHTR) is the most popular stock in this table. On the other hand CRH PLC (ADR) (NYSE:CRH) is the least popular one with only 7 bullish hedge fund positions. KKR & Co. L.P. (NYSE:KKR), with 30 bullish hedge fund positions, 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 focusing on stocks that hedge funds are piling on. In this regard, CHTR might be a better candidate to consider a long position.

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