Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
Is Kelly Services, Inc. (NASDAQ:KELYA) a bargain? Prominent investors are turning bullish. The number of bullish hedge fund positions that are disclosed in regulatory 13F filings inched up by 1 in recent months. KELYA was in 10 hedge funds’ portfolios at the end of the third quarter of 2016. There were 9 hedge funds in our database with KELYA holdings at the end of the second quarter. At the end of this article we will also compare KELYA to other stocks including TerraForm Global Inc (NASDAQ:GLBL), Sandy Spring Bancorp Inc. (NASDAQ:SASR), and ORBCOMM Inc (NASDAQ:ORBC) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
What does the smart money think about Kelly Services, Inc. (NASDAQ:KELYA)?
At Q3’s end, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a rise 11% from the second quarter of 2016. On the other hand, there were a total of 5 hedge funds with a bullish position in KELYA at the beginning of this year, so the number of bullish hedge fund positions has doubled in 2016. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Chuck Royce’s Royce & Associates has the most valuable position in Kelly Services, Inc. (NASDAQ:KELYA), worth close to $26 million. On Royce & Associates’ heels is Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, holding a $3.7 million position. Remaining professional money managers that hold long positions encompass Cliff Asness’ AQR Capital Management, Ken Griffin’s Citadel Investment Group, and Joel Greenblatt’s Gotham Asset Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds, which is based on the performance of their 13F long positions in non-micro-cap stocks.