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Hedge Funds Have Never Been More Bullish On CarMax Inc (KMX)

Hedge Funds Have Never Been More Bullish On CarMax Inc (KMX)

see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.” data-reactid=”13″>So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.

Tom Gayner

Dow reaching 40000 in a year, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to take a look at the latest hedge fund action regarding CarMax Inc (NYSE:KMX).” data-reactid=”34″>Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to take a look at the latest hedge fund action regarding CarMax Inc (NYSE:KMX).

How are hedge funds trading CarMax Inc (NYSE:KMX)?

At Q2’s end, a total of 39 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 34% from the first quarter of 2019. The graph below displays the number of hedge funds with bullish position in KMX over the last 16 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).

No of Hedge Funds with KMX Positions

OKTA), Apollo Global Management, Inc. (NYSE:APO), American Airlines Group Inc (NASDAQ:AAL), and Wynn Resorts, Limited (NASDAQ:WYNN). This group of stocks’ market values match KMX’s market value.” data-reactid=”63″>Let’s also examine hedge fund activity in other stocks similar to CarMax Inc (NYSE:KMX). We will take a look at Okta, Inc. (NASDAQ:OKTA), Apollo Global Management, Inc. (NYSE:APO), American Airlines Group Inc (NASDAQ:AAL), and Wynn Resorts, Limited (NASDAQ:WYNN). This group of stocks’ market values match KMX’s market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position OKTA,39,1259179,-4 APO,23,1702873,5 AAL,34,2010537,-7 WYNN,39,1943762,-5 Average,33.75,1729088,-2.75 [/table]

OKTA) is the most popular stock in this table. On the other hand Apollo Global Management, Inc. (NYSE:APO) is the least popular one with only 23 bullish hedge fund positions. CarMax Inc (NYSE:KMX) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately KMX wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on KMX were disappointed as the stock returned 1.3% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks (view the video below) among hedge funds as many of these stocks already outperformed the market so far this year. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.” data-reactid=”66″>As you can see these stocks had an average of 33.75 hedge funds with bullish positions and the average amount invested in these stocks was $1729 million. That figure was $2156 million in KMX’s case. Okta, Inc. (NASDAQ:OKTA) is the most popular stock in this table. On the other hand Apollo Global Management, Inc. (NYSE:APO) is the least popular one with only 23 bullish hedge fund positions. CarMax Inc (NYSE:KMX) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately KMX wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on KMX were disappointed as the stock returned 1.3% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks (view the video below) among hedge funds as many of these stocks already outperformed the market so far this year. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

5 Most Popular Stocks Among Hedge Funds

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