Kelly Services, Inc. (KELYA): Are Hedge Funds Right About This Stock?

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Should Kelly Services, Inc. (NASDAQ:KELYA) investors track the following data?

To many traders, hedge funds are seen as delayed, old financial tools of an era lost to time. Although there are over 8,000 hedge funds in operation in present day, this site looks at the masters of this group, close to 525 funds. It is widely held that this group oversees most of all hedge funds’ total capital, and by paying attention to their best equity investments, we’ve identified a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).

Equally as key, bullish insider trading activity is a second way to analyze the world of equities. Obviously, there are a variety of stimuli for an insider to sell shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the valuable potential of this strategy if you know what to do (learn more here).

Now that that’s out of the way, we’re going to analyze the newest info surrounding Kelly Services, Inc. (NASDAQ:KELYA).

Hedge fund activity in Kelly Services, Inc. (NASDAQ:KELYA)

Heading into Q3, a total of 8 of the hedge funds we track held long positions in this stock, a change of -33% from the first quarter. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes considerably.

Kelly Services, Inc. (NASDAQ:KELYA)Out of the hedge funds we follow, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Kelly Services, Inc. (NASDAQ:KELYA). Royce & Associates has a $19.4 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Third Avenue Management, managed by Martin Whitman, which held a $5 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other hedgies that are bullish include Joel Greenblatt’s Gotham Asset Management, Cliff Asness’s AQR Capital Management and Matthew Hulsizer’s PEAK6 Capital Management.

Due to the fact Kelly Services, Inc. (NASDAQ:KELYA) has faced bearish sentiment from upper-tier hedge fund managers, we can see that there exists a select few hedge funds that decided to sell off their positions entirely in Q1. Interestingly, John Overdeck and David Siegel’s Two Sigma Advisors dumped the biggest stake of the “upper crust” of funds we key on, valued at about $0.6 million in stock. Neil Chriss’s fund, Hutchin Hill Capital, also dropped its stock, about $0.6 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 4 funds in Q1.

Insider trading activity in Kelly Services, Inc. (NASDAQ:KELYA)

Legal insider trading, particularly when it’s bullish, is at its handiest when the company in focus has experienced transactions within the past six months. Over the last half-year time period, Kelly Services, Inc. (NASDAQ:KELYA) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators in other stocks similar to Kelly Services, Inc. (NASDAQ:KELYA). These stocks are Trueblue Inc (NYSE:TBI), Kforce Inc. (NASDAQ:KFRC), DICE HOLDINGS, INC. (NYSE:DHX), Compass Diversified Holdings (NYSE:CODI), and AMN Healthcare Services, Inc. (NYSE:AHS). This group of stocks are the members of the staffing & outsourcing services industry and their market caps are similar to KELYA’s market cap.

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