We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended December 31, so let’s proceed with the discussion of the hedge fund sentiment on Amedisys Inc (NASDAQ:AMED).
Hedge fund interest in Amedisys Inc (NASDAQ:AMED) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Hanesbrands Inc. (NYSE:HBI), Kirby Corporation (NYSE:KEX), and Exelixis, Inc. (NASDAQ:EXEL) to gather more data points. Our calculations also showed that AMED isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
In today’s marketplace there are many signals shareholders can use to size up publicly traded companies. Some of the less known signals are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the best fund managers can trounce the broader indices by a superb amount (see the details here).
Philip Hempleman of Ardsley Partners
We leave no stone unturned when looking for the next great investment idea. For example we recently identified a stock that trades 25% below the net cash on its balance sheet. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences, and go through short-term trade recommendations like this one. We even check out the recommendations of services with hard to believe track records. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s review the key hedge fund action regarding Amedisys Inc (NASDAQ:AMED).
What does smart money think about Amedisys Inc (NASDAQ:AMED)?
At Q4’s end, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 32 hedge funds with a bullish position in AMED a year ago. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, D E Shaw, managed by D. E. Shaw, holds the largest position in Amedisys Inc (NASDAQ:AMED). D E Shaw has a $62.7 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by GLG Partners, led by Noam Gottesman, holding a $40.8 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish encompass Jeremy Green’s Redmile Group, Principal Global Investors’s Columbus Circle Investors and Cliff Asness’s AQR Capital Management. In terms of the portfolio weights assigned to each position Integral Health Asset Management allocated the biggest weight to Amedisys Inc (NASDAQ:AMED), around 4.22% of its 13F portfolio. Columbus Circle Investors is also relatively very bullish on the stock, setting aside 0.73 percent of its 13F equity portfolio to AMED.
Judging by the fact that Amedisys Inc (NASDAQ:AMED) has faced falling interest from hedge fund managers, it’s easy to see that there was a specific group of money managers that decided to sell off their full holdings in the third quarter. At the top of the heap, Matthew Hulsizer’s PEAK6 Capital Management cut the biggest position of all the hedgies monitored by Insider Monkey, comprising about $6.2 million in stock, and Alec Litowitz and Ross Laser’s Magnetar Capital was right behind this move, as the fund dropped about $5.8 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Amedisys Inc (NASDAQ:AMED) but similarly valued. These stocks are Hanesbrands Inc. (NYSE:HBI), Kirby Corporation (NYSE:KEX), Exelixis, Inc. (NASDAQ:EXEL), and JBG SMITH Properties (NYSE:JBGS). This group of stocks’ market values resemble AMED’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HBI | 40 | 736481 | 6 |
| KEX | 26 | 711162 | 5 |
| EXEL | 23 | 797055 | -7 |
| JBGS | 19 | 269769 | -1 |
| Average | 27 | 628617 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27 hedge funds with bullish positions and the average amount invested in these stocks was $629 million. That figure was $220 million in AMED’s case. Hanesbrands Inc. (NYSE:HBI) is the most popular stock in this table. On the other hand JBG SMITH Properties (NYSE:JBGS) is the least popular one with only 19 bullish hedge fund positions. Amedisys Inc (NASDAQ:AMED) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 17.4% in 2020 through March 25th but still beat the market by 5.5 percentage points. A small number of hedge funds were also right about betting on AMED as the stock returned -3.1% during the same time period and outperformed the market by an even larger margin.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
