At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Tiger Global because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.

Is KeyCorp (NYSE:KEY) going to take off soon? Prominent investors are becoming less hopeful. The number of bullish hedge fund bets were trimmed by 8 lately. Our calculations also showed that KEY isn't among the 30 most popular stocks among hedge funds. KEY was in 33 hedge funds' portfolios at the end of December. There were 41 hedge funds in our database with KEY positions at the end of the previous quarter.

Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

We're going to analyze the fresh hedge fund action surrounding KeyCorp (NYSE:KEY).

What does the smart money think about KeyCorp (NYSE:KEY)?

At the end of the fourth quarter, a total of 33 of the hedge funds tracked by Insider Monkey were long this stock, a change of -20% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in KEY over the last 14 quarters. With the smart money's capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

The largest stake in KeyCorp (NYSE:KEY) was held by Pzena Investment Management, which reported holding $104.2 million worth of stock at the end of September. It was followed by Millennium Management with a $91 million position. Other investors bullish on the company included Arrowstreet Capital, Basswood Capital, and Adage Capital Management.