Should You Follow Hedge Funds Back Into Kilroy Realty Corp (KRC)?

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As industry-wide interest jumped, key hedge funds have jumped into Kilroy Realty Corp (NYSE:KRC) headfirst. Waterfront Capital Partners, led by Eduardo Abush, assembled the biggest position in Kilroy Realty Corp (NYSE:KRC). Waterfront Capital Partners had $29.6 million invested in the company at the end of the quarter. Balyasny Asset Management also initiated a $13.6 million position during the quarter. The following funds were also among the new KRC investors: Michael Swotes’ Castle Ridge Investment Management, David E. Shaw’s D E Shaw, and George Hall’s Clinton Group.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Kilroy Realty Corp (NYSE:KRC) but similarly valued. We will take a look at Spirit Realty Capital Inc (NYSE:SRC), Rollins, Inc. (NYSE:ROL), NVR, Inc. (NYSE:NVR), and DDR Corp (NYSE:DDR). All of these stocks’ market caps are similar to KRC’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SRC 17 340235 -3
ROL 11 346487 -4
NVR 22 590787 -3
DDR 18 207446 2

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $371 million. That figure was $213 million in KRC’s case. NVR, Inc. (NYSE:NVR) is the most popular stock in this table. On the other hand Rollins, Inc. (NYSE:ROL) is the least popular one with only 11 bullish hedge fund positions. Kilroy Realty Corp (NYSE:KRC) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard NVR might be a better candidate to consider taking a long position in.

Disclosure: None

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