Hedge Funds Are Betting On Amedisys Inc (AMED)

Investing in small cap stocks has historically been a way to outperform the market, as small cap companies typically grow faster on average than the blue chips. That outperformance comes with a price, however, as there are occasional periods of higher volatility. The time period between June 25 and the end of October was one of those periods, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points. Given that the funds we track tend to have a disproportionate amount of their portfolios in smaller cap stocks, they have seen some volatility in their portfolios too. Actually their moves are potentially one of the factors that contributed to this volatility. In this article, we use our extensive database of hedge fund holdings to find out what the smart money thinks of Amedisys Inc (NASDAQ:AMED).

Amedisys Inc (NASDAQ:AMED) investors should pay attention to an increase in enthusiasm from smart money recently. Amedisys Inc (NASDAQ:AMED) was in 24 hedge funds’ portfolios at the end of the third quarter of 2015. There were 19 hedge funds in our database with Amedisys Inc (NASDAQ:AMED) holdings at the end of the previous quarter. 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 Alon USA Energy, Inc. (NYSE:ALJ), World Wrestling Entertainment, Inc. (NYSE:WWE), and EP Energy Corp (NYSE:EPE) to gather more data points.

At the moment, there are a multitude of gauges stock traders put to use to evaluate publicly traded companies. A duo of the less known gauges are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the top picks of the best investment managers can outpace their index-focused peers by a healthy amount (see the details here).

Now, let’s go over the new action surrounding Amedisys Inc (NASDAQ:AMED).

What does the smart money think about Amedisys Inc (NASDAQ:AMED)?

At the end of September, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 26% from the previous quarter. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Conan Laughlin’s North Tide Capital has the number one position in Amedisys Inc (NASDAQ:AMED), worth close to $151.9 million, corresponding to 13.2% of its total 13F portfolio. Coming in second is D E Shaw, with a $19.3 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish consist of Israel Englander’s Millennium Management, John Overdeck and David Siegel’s Two Sigma Advisors, and Renaissance Technologies.

As one would reasonably expect, key money managers were breaking ground themselves. Highbridge Capital Management, managed by Glenn Russell Dubin, initiated the largest position in Amedisys Inc (NASDAQ:AMED). Highbridge Capital Management had $1.5 million invested in the company at the end of the quarter. Peter Algert and Kevin Coldiron’s Algert Coldiron Investors also initiated a $0.3 million position during the quarter. The following funds were also among the new Amedisys Inc (NASDAQ:AMED) investors: Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, Paul Tudor Jones’ Tudor Investment Corp, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Amedisys Inc (NASDAQ:AMED) but similarly valued. These stocks are Alon USA Energy, Inc. (NYSE:ALJ), World Wrestling Entertainment, Inc. (NYSE:WWE), EP Energy Corp (NYSE:EPE), and HFF, Inc. (NYSE:HF). This group of stocks’ market values is closest to Amedisys Inc (NASDAQ:AMED)’s market value.

As you can see, these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $108 million. That figure was $224 million in Amedisys Inc (NASDAQ:AMED)’s case. Alon USA Energy, Inc. (NYSE:ALJ) is the most popular stock in this table. On the other hand, HFF, Inc. (NYSE:HF) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks, Amedisys Inc (NASDAQ:AMED) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.