Is Kura Sushi USA (KRUS) A Good Stock To Buy Now?

While the market driven by short-term sentiment influenced by the accomodative interest rate environment in the US, virus news and stimulus talks, many smart money investors are starting to get cautious towards the current bull run since March and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 30,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Kura Sushi USA, Inc. (NASDAQ:KRUS).

Is Kura Sushi USA (KRUS) a good stock to buy now? KRUS investors should pay attention to an increase in enthusiasm from smart money of late. Kura Sushi USA, Inc. (NASDAQ:KRUS) was in 5 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 8. There were 4 hedge funds in our database with KRUS positions at the end of the second quarter. Our calculations also showed that KRUS 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).

Video: Watch our video about the top 5 most popular hedge fund stocks.

To most investors, hedge funds are perceived as slow, outdated investment vehicles of years past. While there are greater than 8000 funds in operation at present, Our experts look at the top tier of this group, approximately 850 funds. These hedge fund managers oversee the lion’s share of the smart money’s total capital, and by observing their finest picks, Insider Monkey has found numerous investment strategies that have historically exceeded the broader indices. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .

Steve Leonard Pacifica Capital

Steve Leonard of Pacifica 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 15 best blue chip stocks 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 let’s review the latest hedge fund action regarding Kura Sushi USA, Inc. (NASDAQ:KRUS).

What have hedge funds been doing with Kura Sushi USA, Inc. (NASDAQ:KRUS)?

At third quarter’s end, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards KRUS over the last 21 quarters. 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 Kura Sushi USA, Inc. (NASDAQ:KRUS) was held by Pacifica Capital Investments, which reported holding $9.7 million worth of stock at the end of September. It was followed by Royce & Associates with a $2.1 million position. Other investors bullish on the company included Cannell Capital, Gratia Capital, and Springbok Capital. In terms of the portfolio weights assigned to each position Gratia Capital allocated the biggest weight to Kura Sushi USA, Inc. (NASDAQ:KRUS), around 6.17% of its 13F portfolio. Pacifica Capital Investments is also relatively very bullish on the stock, designating 4.46 percent of its 13F equity portfolio to KRUS.

As industrywide interest jumped, some big names have been driving this bullishness. Gratia Capital, managed by Steve Pei, initiated the most valuable position in Kura Sushi USA, Inc. (NASDAQ:KRUS). Gratia Capital had $1.9 million invested in the company at the end of the quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Kura Sushi USA, Inc. (NASDAQ:KRUS) but similarly valued. We will take a look at Cumulus Media Inc (NASDAQ:CMLS), IntriCon Corporation (NASDAQ:IIN), Palatin Technologies, Inc. (NYSE:PTN), Pieris Pharmaceuticals, Inc. (NASDAQ:PIRS), C&F Financial Corp (NASDAQ:CFFI), Clipper Realty Inc. (NYSE:CLPR), and Everspin Technologies, Inc. (NASDAQ:MRAM). All of these stocks’ market caps are similar to KRUS’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CMLS 7 24191 -4
IIN 3 16288 0
PTN 4 2079 -9
PIRS 15 31643 -6
CFFI 2 4115 0
CLPR 10 26099 0
MRAM 4 4461 -2
Average 6.4 15554 -3

View table here if you experience formatting issues.

As you can see these stocks had an average of 6.4 hedge funds with bullish positions and the average amount invested in these stocks was $16 million. That figure was $17 million in KRUS’s case. Pieris Pharmaceuticals, Inc. (NASDAQ:PIRS) is the most popular stock in this table. On the other hand C&F Financial Corp (NASDAQ:CFFI) is the least popular one with only 2 bullish hedge fund positions. Kura Sushi USA, Inc. (NASDAQ:KRUS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for KRUS is 36.3. 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. 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 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on KRUS as the stock returned 28.9% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.

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