Hedge Fund Buys 622,500 Knowles Shares as Stock Outperforms S&P 500 — Should You?

• New York-based Harvey Partners initiated a new stake in Knowles Corporation, acquiring 622,500 shares for an estimated $14.5 million in the third quarter.

• The change represents 1.3% of Harvey Partners’ 13F reportable assets under management as of September 30.

• The KN position is not among the fund’s top five holdings.

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On November 14, New York-based Harvey Partners disclosed a new position in Knowles Corporation (NYSE:KN), adding 622,500 shares valued at approximately $14.5 million during the third quarter.

According to a filing with the Securities and Exchange Commission dated November 14, Harvey Partners established a new position in Knowles Corporation (NYSE:KN). The firm reported a holding of 622,500 shares, amounting to a market value of approximately $14.5 million as of September 30. The position accounts for 1.3% of the fund’s reportable U.S. equity assets.

Top holdings after the filing:

• NYSE: NPO: $56.3 million (5.1% of AUM)

• NYSE: BWXT: $53.4 million (4.9% of AUM)

• NYSE: AZZ: $53 million (4.8% of AUM)

• NASDAQ: GLDD: $44.4 million (4% of AUM)

• NASDAQ: ADEA: $43.9 million (4% of AUM)

As of Friday, shares of Knowles Corporation were priced at $23.37, up 20% over the past year and well outperforming the S&P 500, which is up 13% in the same period.

• Knowles Corporation offers micro-acoustic microphones, balanced armature speakers, audio processors, high-performance capacitors, and RF solutions across consumer electronics, medtech, defense, electric vehicle, industrial, and communications sectors.

• The company generates revenue by designing, manufacturing, and selling audio and precision device components to original equipment manufacturers, contract manufacturers, and distributors worldwide.

• Primary customers include global OEMs in mobile, hearing health, IoT, computing, medical, satellite communications, and industrial markets.

Knowles Corporation is a leading provider of advanced micro-acoustic, audio, and precision device solutions with a global footprint and a diversified customer base. The company leverages decades of expertise to serve high-growth markets such as mobile communications, hearing health, and industrial electronics.

A new position in a volatile name like Knowles matters because it signals where managers see durable demand. In other words, Harvey Partners’ move might suggest confidence that Knowles’ exposure to diversified end-markets—from hearing health to defense and industrial electronics—can support steadier earnings even when consumer hardware cycles soften.

In the third quarter, Harvey Partners initiated a $14.5 million position, making Knowles a modest but intentional addition at 1.3% of reportable assets. And although shares have traded choppily in recent years, Knowles has outperformed the broader market over the past 12 months, rising 20% versus the S&P 500’s 13% gain.

Recent earnings help explain the interest. Third-quarter revenue grew 7% year over year to $152.9 million, while gross margin expanded to 45.7%, and non-GAAP EPS came in at $0.33—above the midpoint of guidance. Management highlighted strong design activity, a healthy backlog, and reiterated expectations for 6% organic revenue growth this year, with fourth-quarter revenue projected to rise another 9% year over year. The company also generated $29 million in operating cash and repurchased $20 million of stock, underscoring improving fundamentals that long-term investors may view as a stabilizing force despite ongoing share volatility.

13F reportable assets: Assets that institutional investment managers must disclose quarterly to the SEC, showing their U.S. equity holdings.
Assets under management (AUM): The total market value of investments managed on behalf of clients by a fund or firm.
Alpha: A measure of an investment’s performance relative to a benchmark, showing value added or subtracted by active management.
Original equipment manufacturer (OEM): A company that produces parts or equipment used in another company’s end products.
Micro-acoustic: Technology involving very small audio components, such as miniature microphones and speakers, for electronic devices.
Balanced armature speakers: Small, precise speakers commonly used in hearing aids and in-ear monitors for accurate sound reproduction.
RF solutions: Products or technologies related to radio frequency, used for wireless communication in electronic devices.
Contract manufacturer: A company hired to produce goods on behalf of another company, often at scale and to specific requirements.
TTM: The 12-month period ending with the most recent quarterly report.

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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Azz and BWX Technologies. The Motley Fool has a disclosure policy.

Hedge Fund Buys 622,500 Knowles Shares as Stock Outperforms S&P 500 — Should You? was originally published by The Motley Fool