Cross Country Healthcare, Inc. (CCRN): Are Hedge Funds Right About This Stock?

Cross Country Healthcare, Inc. (NASDAQ:CCRN) has experienced an increase in enthusiasm from smart money recently.

In the eyes of most market participants, hedge funds are perceived as unimportant, outdated financial tools of yesteryear. While there are more than 8000 funds with their doors open today, we at Insider Monkey look at the crème de la crème of this club, about 450 funds. It is estimated that this group oversees most of all hedge funds’ total asset base, and by paying attention to their highest performing picks, we have unsheathed a number of investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

Just as beneficial, optimistic insider trading activity is a second way to parse down the stock market universe. Obviously, there are lots of incentives for an upper level exec to sell shares of his or her company, but just one, very clear reason why they would buy. Several empirical studies have demonstrated the useful potential of this tactic if you know what to do (learn more here).

With all of this in mind, let’s take a gander at the latest action encompassing Cross Country Healthcare, Inc. (NASDAQ:CCRN).

How have hedgies been trading Cross Country Healthcare, Inc. (NASDAQ:CCRN)?

At the end of the first quarter, a total of 11 of the hedge funds we track held long positions in this stock, a change of 10% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes considerably.

When looking at the hedgies we track, Third Avenue Management, managed by Martin Whitman, holds the most valuable position in Cross Country Healthcare, Inc. (NASDAQ:CCRN). Third Avenue Management has a $10.8 million position in the stock, comprising 0.2% of its 13F portfolio. On Third Avenue Management’s heels is James E. Flynn of Deerfield Management, with a $9 million position; 0.5% of its 13F portfolio is allocated to the company. Other hedge funds with similar optimism include Stephen DuBois’s Camber Capital Management, Chuck Royce’s Royce & Associates and Barton Biggs’s Traxis Partners.

As aggregate interest increased, some big names have jumped into Cross Country Healthcare, Inc. (NASDAQ:CCRN) headfirst. Millennium Management, managed by Israel Englander, initiated the largest position in Cross Country Healthcare, Inc. (NASDAQ:CCRN). Millennium Management had 0.6 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $0.1 million investment in the stock during the quarter.

How are insiders trading Cross Country Healthcare, Inc. (NASDAQ:CCRN)?

Insider trading activity, especially when it’s bullish, is most useful when the company in focus has experienced transactions within the past six months. Over the last six-month time frame, Cross Country Healthcare, Inc. (NASDAQ:CCRN) has seen 1 unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Cross Country Healthcare, Inc. (NASDAQ:CCRN). These stocks are Barrett Business Services, Inc. (NASDAQ:BBSI), RCM Technologies, Inc. (NASDAQ:RCMT), CDI Corp. (NYSE:CDI), Heidrick & Struggles International, Inc. (NASDAQ:HSII), and Hudson Global Inc (NASDAQ:HSON). This group of stocks are the members of the staffing & outsourcing services industry and their market caps resemble CCRN’s market cap.

With the results exhibited by our time-tested strategies, everyday investors should always pay attention to hedge fund and insider trading activity, and Cross Country Healthcare, Inc. (NASDAQ:CCRN) is no exception.

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