Is Health Net, Inc. (NYSE:HNT) a good investment today? The best stock pickers are getting less bullish. The number of long hedge fund positions dropped by 6 in recent months.
In the 21st century investor’s toolkit, there are many methods market participants can use to analyze the equity markets. Two of the most useful are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best fund managers can trounce their index-focused peers by a solid margin (see just how much).
Just as integral, optimistic insider trading activity is another way to break down the marketplace. As the old adage goes: there are a number of reasons for an executive to sell shares of his or her company, but just one, very obvious reason why they would behave bullishly. Several academic studies have demonstrated the valuable potential of this strategy if investors understand where to look (learn more here).
With these “truths” under our belt, we’re going to take a look at the recent action surrounding Health Net, Inc. (NYSE:HNT).
What have hedge funds been doing with Health Net, Inc. (NYSE:HNT)?
In preparation for this year, a total of 20 of the hedge funds we track were bullish in this stock, a change of -23% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their stakes meaningfully.
When looking at the hedgies we track, Iridian Asset Management, managed by David Cohen and Harold Levy, holds the biggest position in Health Net, Inc. (NYSE:HNT). Iridian Asset Management has a $140 million position in the stock, comprising 2.3% of its 13F portfolio. Coming in second is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which held a $68 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other peers with similar optimism include Christopher MedlockáJames’s Partner Fund Management, Thomas Ellis and Todd Hammer’s North Run Capital and Steven Cohen’s SAC Capital Advisors.
Judging by the fact that Health Net, Inc. (NYSE:HNT) has faced declining sentiment from the aggregate hedge fund industry, it’s safe to say that there exists a select few hedge funds that slashed their positions entirely in Q4. Interestingly, Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC cut the biggest investment of all the hedgies we key on, worth close to $45 million in stock., and Dmitry Balyasny of Balyasny Asset Management was right behind this move, as the fund sold off about $7 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 6 funds in Q4.
What do corporate executives and insiders think about Health Net, Inc. (NYSE:HNT)?
Insider buying is most useful when the company in focus has experienced transactions within the past half-year. Over the last half-year time period, Health Net, Inc. (NYSE:HNT) has experienced zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
With the returns exhibited by Insider Monkey’s strategies, everyday investors must always pay attention to hedge fund and insider trading sentiment, and Health Net, Inc. (NYSE:HNT) applies perfectly to this mantra.
Click here to learn more about Insider Monkey’s Hedge Fund Newsletter
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.
