Is KKR & Co. L.P. (NYSE:KKR) a splendid investment now? The best stock pickers are getting more bullish. The number of long hedge fund positions went up by 3 lately.
According to most stock holders, hedge funds are viewed as worthless, old investment tools of years past. While there are over 8000 funds trading at the moment, we hone in on the crème de la crème of this group, about 450 funds. Most estimates calculate that this group oversees most of all hedge funds’ total capital, and by paying attention to their top equity investments, we have brought to light a number of investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Equally as beneficial, optimistic insider trading sentiment is another way to break down the financial markets. Just as you’d expect, there are lots of motivations for an upper level exec to get rid of shares of his or her company, but only one, very clear reason why they would initiate a purchase. Plenty of academic studies have demonstrated the valuable potential of this strategy if you understand what to do (learn more here).
With all of this in mind, we’re going to take a look at the latest action surrounding KKR & Co. L.P. (NYSE:KKR).
How have hedgies been trading KKR & Co. L.P. (NYSE:KKR)?
Heading into Q2, a total of 23 of the hedge funds we track were long in this stock, a change of 15% from the first quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings considerably.
According to our comprehensive database, Ariel Investments, managed by John W. Rogers, holds the largest position in KKR & Co. L.P. (NYSE:KKR). Ariel Investments has a $147.7 million position in the stock, comprising 2.5% of its 13F portfolio. Sitting at the No. 2 spot is Jim Simons of Renaissance Technologies, with a $79.5 million position; 0.2% of its 13F portfolio is allocated to the company. Remaining hedgies with similar optimism include Thomas E. Claugus’s GMT Capital, Leon Cooperman’s Omega Advisors and Chuck Royce’s Royce & Associates.
As one would reasonably expect, specific money managers have jumped into KKR & Co. L.P. (NYSE:KKR) headfirst. Chilton Investment Company, managed by Richard Chilton, initiated the biggest position in KKR & Co. L.P. (NYSE:KKR). Chilton Investment Company had 20.7 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also made a $4.6 million investment in the stock during the quarter. The following funds were also among the new KKR investors: Wojciech Uzdelewicz’s Espalier Global Management, Bruce Silver’s Silver Capital Management LLC, and Robert Raiff’s Raiff Partners.
How are insiders trading KKR & Co. L.P. (NYSE:KKR)?
Insider buying is most useful when the primary stock in question has seen transactions within the past half-year. Over the last half-year time frame, KKR & Co. L.P. (NYSE:KKR) has seen zero unique insiders buying, and 2 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to KKR & Co. L.P. (NYSE:KKR). These stocks are American Capital Ltd. (NASDAQ:ACAS), Waddell & Reed Financial, Inc. (NYSE:WDR), Lazard Ltd (NYSE:LAZ), Legg Mason, Inc. (NYSE:LM), and Och-Ziff Capital Management Group LLC (NYSE:OZM). This group of stocks belong to the asset management industry and their market caps are closest to KKR’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| American Capital Ltd. (NASDAQ:ACAS) | 24 | 0 | 10 |
| Waddell & Reed Financial, Inc. (NYSE:WDR) | 13 | 0 | 8 |
| Lazard Ltd (NYSE:LAZ) | 19 | 0 | 3 |
| Legg Mason, Inc. (NYSE:LM) | 18 | 0 | 1 |
| Och-Ziff Capital Management Group LLC (NYSE:OZM) | 13 | 0 | 1 |
With the results shown by our time-tested strategies, retail investors must always keep an eye on hedge fund and insider trading sentiment, and KKR & Co. L.P. (NYSE:KKR) shareholders fit into this picture quite nicely.
