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Why Kohl’s Corporation (KSS) Shares Surged Higher

Kohl’s Corporation (NYSE:KSS) shares have surged by 6% in afternoon trading as sentiment surrounding retailers has, at least for the moment, turned bullish. Although there is no fundamental news concerning Kohl’s today, the company’s peer,  L Brands Inc (NYSE:LB), reported March sales data that may have been better than some investor expectations. In particular, L Brands’ net sales for the five months ended April 1 fell 7% year-over-year and its comparable sales fell 10% (with around 2% to 3% due to a later Easter in 2017).

Although many bears have predicted that department stores could be the next victim to e-commerce giant Amazon.com as various technologies such as virtual reality and drone delivery blur the line between online shopping and real shopping, many investors believe the sector has a future and could still deliver solid returns for investors. To bulls, Kohl’s Corporation (NYSE:KSS) certainly looks interesting given the company’s reasonable forward P/E of 10.34 and dividend yield of 5.47% at current prices.

What Does The Smart Money Sentiment Say?

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 39.7% gains over the past 12 months and outperformed the 24.1% gain enjoyed by the S&P 500 ETFs. Our enhanced small-cap hedge fund strategy returned more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points over the last 4.5 years (see details here).

Smart money activity was relatively unchanged for Kohl’s in the fourth quarter. Of the 742 elite funds we track, 27 funds owned $394.11 million of Kohl’s Corporation (NYSE:KSS) and accounted for 4.50% of the float on December 31, versus 29 funds and $409.99 million respectively on September 30. In terms of noteworthy individual moves, George Soros‘ Soros Fund Management intiated a new stake of 600,819 shares in the retailer in the fourth quarter.

The Bottom Line

Traders have bid up Kohl’s Corporation (NYSE:KSS) today due to improved sentiment/potential short covering. For more reading, check out ‘Top 10 Online Shopping Sites In the US‘.

Disclosure:None

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