Should You Avoid KapStone Paper and Packaging Corp. (KS)?

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards KapStone Paper and Packaging Corp. (NYSE:KS) .

Is KapStone Paper and Packaging Corp. (NYSE:KS) a buy, sell, or hold? Money managers are actually turning less bullish. The number of long hedge fund bets were trimmed by 3 lately. KS was in 18 hedge funds’ portfolios at the end of September. There were 21 hedge funds in our database with KS positions at the end of the previous quarter. At the end of this article we will also compare KS to other stocks including Westamerica Bancorporation (NASDAQ:WABC), Pacira Pharmaceuticals Inc (NASDAQ:PCRX), and SUPERVALU INC. (NYSE:SVU) 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.

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How have hedgies been trading KapStone Paper and Packaging Corp. (NYSE:KS)?

Heading into the fourth quarter of 2016, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop 14% from one quarter earlier. On the other hand, 14 hedge funds held shares or bullish call options in KS heading into this year, so ownership of the stock is still up since then. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Israel Englander’s Millennium Management holds the biggest position in KapStone Paper and Packaging Corp. (NYSE:KS) which has a $52.6 million position in the stock. Sitting at the No. 2 spot is Anand Parekh’s Alyeska Investment Group, which holds a $30.6 million position. Remaining members of the smart money that are bullish include Steve Cohen’s Point72 Asset Management, Gilchrist Berg’s Water Street Capital, and Joe Huber’s Huber Capital 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-microcap stocks.