Is Knowles Corp (KN) A Good Stock To Buy?

With a general bullishness amongst the heavyweights, some big names have been driving this bullishness.  Marshall Wace LLP  initiated a $2.5 million position during the quarter. The following funds were also among the new KN investors:  Simcoe Capital Management, Peter Muller’s PDT Partners, and Ken Griffin’s Citadel Investment Group.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Knowles Corp (NYSE:KN) but similarly valued. These stocks are Sonic Corporation (NASDAQ:SONC), Evertec Inc (NYSE:EVTC), TowneBank (NASDAQ:TOWN), and OSI Systems, Inc. (NASDAQ:OSIS). This group of stocks’ market values are closest to KN’s market value.

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $172 million. That figure was $18 million in KN’s case. Sonic Corporation (NASDAQ:SONC) is the most popular stock in this table. On the other hand TowneBank (NASDAQ:TOWN) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Knowles Corp (NYSE:KN) is as less popular than TOWN. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.