Hedge Funds Are Buying Health Care REIT, Inc. (HCN)

Is Health Care REIT, Inc. (NYSE:HCN) a good investment?

If you were to ask many traders, hedge funds are perceived as bloated, outdated investment tools of a period lost to current times. Although there are In excess of 8,000 hedge funds with their doors open in present day, this site looks at the top tier of this group, around 525 funds. It is assumed that this group has its hands on the majority of all hedge funds’ total capital, and by monitoring their best picks, we’ve discovered a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).

Equally as necessary, bullish insider trading activity is another way to look at the world of equities. There are a number of stimuli for an upper level exec to sell shares of his or her company, but just one, very simple reason why they would behave bullishly. Plenty of empirical studies have demonstrated the market-beating potential of this strategy if investors know where to look (learn more here).

Furthermore, let’s discuss the newest info for Health Care REIT, Inc. (NYSE:HCN).

What have hedge funds been doing with Health Care REIT, Inc. (NYSE:HCN)?

In preparation for the third quarter, a total of 18 of the hedge funds we track were long in this stock, a change of 20% from the first quarter. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes meaningfully.

When using filings from the hedgies we track, Jeffrey Furber’s AEW Capital Management had the biggest position in Health Care REIT, Inc. (NYSE:HCN), worth close to $131.9 million, comprising 3.4% of its total 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $93.3 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include Jacob Gottlieb’s Visium Asset Management, Phill Gross and Robert Atchinson’s Adage Capital Management and Cliff Asness’s AQR Capital Management.

As industrywide interest increased, particular hedge funds have jumped into Health Care REIT, Inc. (NYSE:HCN) headfirst. AEW Capital Management, managed by Jeffrey Furber, established the most valuable position in Health Care REIT, Inc. (NYSE:HCN). AEW Capital Management had 131.9 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $93.3 million investment in the stock during the quarter. The other funds with brand new HCN positions are Jacob Gottlieb’s Visium Asset Management, Cliff Asness’s AQR Capital Management, and Phill Gross and Robert Atchinson’s Adage Capital Management.

What have insiders been doing with Health Care REIT, Inc. (NYSE:HCN)?

Bullish insider trading is at its handiest when the company in focus has seen transactions within the past 180 days. Over the latest six-month time period, Health Care REIT, Inc. (NYSE:HCN) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to Health Care REIT, Inc. (NYSE:HCN). These stocks are Healthcare Realty Trust Inc (NYSE:HR), Healthcare Trust Of America Inc (NYSE:HTA), Omega Healthcare Investors Inc (NYSE:OHI), HCP, Inc. (NYSE:HCP), and Ventas, Inc. (NYSE:VTR). This group of stocks are in the reit – healthcare facilities industry and their market caps are similar to HCN’s market cap.

Using the returns demonstrated by our research, regular investors should always track hedge fund and insider trading activity, and Health Care REIT, Inc. (NYSE:HCN) shareholders fit into this picture quite nicely.

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