Hedge Funds Are Buying LHC Group, Inc. (LHCG)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article we look at what those investors think of LHC Group, Inc. (NASDAQ:LHCG).

Is LHC Group, Inc. (NASDAQ:LHCG) undervalued? The best stock pickers were buying. The number of bullish hedge fund bets inched up by 2 lately. LHC Group, Inc. (NASDAQ:LHCG) was in 22 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 30. Our calculations also showed that LHCG isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind we’re going to review the latest hedge fund action encompassing LHC Group, Inc. (NASDAQ:LHCG).

Roger Ibbotson of Zebra Capital Management

Do Hedge Funds Think LHCG Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2021, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards LHCG over the last 25 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, Angela Aldrich’s Bayberry Capital Partners has the number one position in LHC Group, Inc. (NASDAQ:LHCG), worth close to $14.9 million, accounting for 4.3% of its total 13F portfolio. The second largest stake is held by D E Shaw, led by D. E. Shaw, holding a $7.1 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other members of the smart money that are bullish comprise Israel Englander’s Millennium Management, Noam Gottesman’s GLG Partners and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Bayberry Capital Partners allocated the biggest weight to LHC Group, Inc. (NASDAQ:LHCG), around 4.26% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, earmarking 1.83 percent of its 13F equity portfolio to LHCG.

As one would reasonably expect, key money managers have been driving this bullishness. Sivik Global Healthcare, managed by Krishen Sud, assembled the largest position in LHC Group, Inc. (NASDAQ:LHCG). Sivik Global Healthcare had $2.4 million invested in the company at the end of the quarter. Jinghua Yan’s TwinBeech Capital also initiated a $1.8 million position during the quarter. The following funds were also among the new LHCG investors: Roger Ibbotson’s Zebra Capital Management, Greg Eisner’s Engineers Gate Manager, and Peter Algert’s Algert Global.

Let’s now review hedge fund activity in other stocks similar to LHC Group, Inc. (NASDAQ:LHCG). These stocks are ICU Medical, Inc. (NASDAQ:ICUI), AllianceBernstein Holding LP (NYSE:AB), Kodiak Sciences Inc (NASDAQ:KOD), Webster Financial Corporation (NYSE:WBS), Science Applications International Corp (NYSE:SAIC), Essent Group Ltd (NYSE:ESNT), and Tenable Holdings, Inc. (NASDAQ:TENB). This group of stocks’ market caps are similar to LHCG’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 19.9 hedge funds with bullish positions and the average amount invested in these stocks was $533 million. That figure was $65 million in LHCG’s case. ICU Medical, Inc. (NASDAQ:ICUI) is the most popular stock in this table. On the other hand AllianceBernstein Holding LP (NYSE:AB) is the least popular one with only 8 bullish hedge fund positions. LHC Group, Inc. (NASDAQ:LHCG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LHCG is 59.4. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately LHCG wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on LHCG were disappointed as the stock returned -12.5% since the end of September (through 12/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.