Kraton Performance Polymers Inc (NYSE:KRA) shareholders have witnessed an increase in support from the world’s most elite money managers of late.
According to most shareholders, hedge funds are viewed as underperforming, old investment tools of yesteryear. While there are over 8000 funds in operation today, we at Insider Monkey look at the bigwigs of this group, about 450 funds. It is widely believed that this group has its hands on most of the smart money’s total asset base, and by monitoring their top investments, we have unearthed a number of investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum 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 outperformed the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Just as beneficial, bullish insider trading sentiment is a second way to parse down the stock market universe. Just as you’d expect, there are lots of incentives for an upper level exec to downsize shares of his or her company, but only one, very simple reason why they would buy. Many empirical studies have demonstrated the impressive potential of this method if “monkeys” know what to do (learn more here).
Consequently, let’s take a look at the recent action surrounding Kraton Performance Polymers Inc (NYSE:KRA).
What have hedge funds been doing with Kraton Performance Polymers Inc (NYSE:KRA)?
At year’s end, a total of 10 of the hedge funds we track were long in this stock, a change of 43% from the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their stakes substantially.
When looking at the hedgies we track, GMT Capital, managed by Thomas E. Claugus, holds the most valuable position in Kraton Performance Polymers Inc (NYSE:KRA). GMT Capital has a $97 million position in the stock, comprising 2.4% of its 13F portfolio. On GMT Capital’s heels is Cliff Asness of AQR Capital Management, with a $5 million position; the fund has 0% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Joel Greenblatt’s Gotham Asset Management, John Overdeck and David Siegel’s Two Sigma Advisors and Ken Griffin’s Citadel Investment Group.
As one would reasonably expect, specific money managers have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, established the largest position in Kraton Performance Polymers Inc (NYSE:KRA). Citadel Investment Group had 1 million invested in the company at the end of the quarter. Mark Kingdon’s Kingdon Capital also initiated a $1 million position during the quarter. The only other fund with a new position in the stock is D. E. Shaw’s D E Shaw.
How are insiders trading Kraton Performance Polymers Inc (NYSE:KRA)?
Bullish insider trading is most useful when the company in focus has seen transactions within the past six months. Over the last six-month time frame, Kraton Performance Polymers Inc (NYSE:KRA) has seen zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Kraton Performance Polymers Inc (NYSE:KRA). These stocks are Koppers Holdings Inc. (NYSE:KOP), WD-40 Company (NASDAQ:WDFC), Flotek Industries Inc (NYSE:FTK), Quaker Chemical Corp (NYSE:KWR), and OM Group, Inc. (NYSE:OMG). This group of stocks belong to the specialty chemicals industry and their market caps resemble KRA’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Koppers Holdings Inc. (NYSE:KOP)||10||0||7|
|WD-40 Company (NASDAQ:WDFC)||4||1||4|
|Flotek Industries Inc (NYSE:FTK)||10||0||2|
|Quaker Chemical Corp (NYSE:KWR)||7||0||6|
|OM Group, Inc. (NYSE:OMG)||17||0||0|
With the returns demonstrated by our tactics, retail investors must always pay attention to hedge fund and insider trading activity, and Kraton Performance Polymers Inc (NYSE:KRA) applies perfectly to this mantra.
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