The Ensign Group, Inc. (NASDAQ:ENSG) was in 5 hedge funds’ portfolio at the end of December. ENSG investors should be aware of a decrease in enthusiasm from smart money recently. There were 5 hedge funds in our database with ENSG holdings at the end of the previous quarter.
According to most traders, hedge funds are assumed to be underperforming, outdated investment tools of years past. While there are greater than 8000 funds trading today, we at Insider Monkey hone in on the top tier of this group, about 450 funds. It is estimated that this group controls the lion’s share of the smart money’s total asset base, and by monitoring their best equity investments, we have uncovered a few investment strategies that have historically beaten the market. 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 outpaced the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Equally as beneficial, bullish insider trading activity is a second way to break down the marketplace. As the old adage goes: there are many reasons for an insider to cut shares of his or her company, but just one, very clear reason why they would behave bullishly. Various empirical studies have demonstrated the valuable potential of this strategy if piggybackers understand where to look (learn more here).
Keeping this in mind, let’s take a peek at the latest action surrounding The Ensign Group, Inc. (NASDAQ:ENSG).
How have hedgies been trading The Ensign Group, Inc. (NASDAQ:ENSG)?
At year’s end, a total of 5 of the hedge funds we track were bullish in this stock, a change of 0% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their stakes substantially.
When looking at the hedgies we track, Cliff Asness’s AQR Capital Management had the largest position in The Ensign Group, Inc. (NASDAQ:ENSG), worth close to $1.9 million, accounting for less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Royce & Associates, managed by Chuck Royce, which held a $0.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include Andy Redleaf’s Whitebox Advisors, Paul Tudor Jones’s Tudor Investment Corp and Ken Griffin’s Citadel Investment Group.
Because The Ensign Group, Inc. (NASDAQ:ENSG) has witnessed falling interest from the smart money, we can see that there is a sect of hedgies that elected to cut their entire stakes heading into 2013. Intriguingly, D. E. Shaw’s D E Shaw cut the biggest stake of all the hedgies we monitor, worth close to $0.3 million in stock., and Israel Englander of Millennium Management was right behind this move, as the fund dropped about $0.3 million worth. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What do corporate executives and insiders think about The Ensign Group, Inc. (NASDAQ:ENSG)?
Insider purchases made by high-level executives is most useful when the primary stock in question has experienced transactions within the past half-year. Over the latest half-year time frame, The Ensign Group, Inc. (NASDAQ:ENSG) has experienced zero unique insiders buying, and 5 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to The Ensign Group, Inc. (NASDAQ:ENSG). These stocks are Five Star Quality Care, Inc. (NYSE:FVE), Emeritus Corporation (NYSE:ESC), Kindred Healthcare, Inc. (NYSE:KND), National HealthCare Corporation (NYSEAMEX:NHC), and Capital Senior Living Corporation (NYSE:CSU). This group of stocks belong to the long-term care facilities industry and their market caps match ENSG’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Five Star Quality Care, Inc. (NYSE:FVE) | 10 | 2 | 0 |
| Emeritus Corporation (NYSE:ESC) | 15 | 0 | 13 |
| Kindred Healthcare, Inc. (NYSE:KND) | 11 | 0 | 7 |
| National HealthCare Corporation (NYSEAMEX:NHC) | 5 | 0 | 4 |
| Capital Senior Living Corporation (NYSE:CSU) | 12 | 0 | 9 |
With the returns demonstrated by the aforementioned tactics, everyday investors must always monitor hedge fund and insider trading activity, and The Ensign Group, Inc. (NASDAQ:ENSG) shareholders fit into this picture quite nicely.
