Hedge Funds Are Selling BioScrip Inc. (BIOS)

BioScrip Inc. (NASDAQ:BIOS) was in 11 hedge funds’ portfolio at the end of December. BIOS investors should be aware of a decrease in hedge fund sentiment recently. There were 13 hedge funds in our database with BIOS holdings at the end of the previous quarter.

To the average investor, there are plenty of indicators shareholders can use to watch the equity markets. A duo of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best investment managers can trounce the broader indices by a superb amount (see just how much).

Just as important, positive insider trading sentiment is another way to break down the stock market universe. As the old adage goes: there are lots of motivations for an insider to cut shares of his or her company, but only one, very simple reason why they would initiate a purchase. Plenty of academic studies have demonstrated the market-beating potential of this strategy if piggybackers understand what to do (learn more here).

With these “truths” under our belt, let’s take a peek at the latest action regarding BioScrip Inc. (NASDAQ:BIOS).

How have hedgies been trading BioScrip Inc. (NASDAQ:BIOS)?

At the end of the fourth quarter, a total of 11 of the hedge funds we track were long in this stock, a change of -15% from the third quarter. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their stakes significantly.

According to our comprehensive database, Prescott Group Capital Management, managed by Phil Frohlich, holds the largest position in BioScrip Inc. (NASDAQ:BIOS). Prescott Group Capital Management has a $15.9 million position in the stock, comprising 4.1% of its 13F portfolio. On Prescott Group Capital Management’s heels is Richard Driehaus of Driehaus Capital, with a $7.4 million position; 0.3% of its 13F portfolio is allocated to the company. Other hedge funds that are bullish include James E. Flynn’s Deerfield Management, Jim Simons’s Renaissance Technologies and Donald Chiboucis’s Columbus Circle Investors.

Judging by the fact that BioScrip Inc. (NASDAQ:BIOS) has faced falling interest from the aggregate hedge fund industry, we can see that there were a few fund managers that decided to sell off their entire stakes heading into 2013. Intriguingly, SAC Subsidiary’s CR Intrinsic Investors sold off the biggest stake of all the hedgies we key on, totaling an estimated $0.9 million in stock., and Wilbur Ross of Invesco Private Capital (WL Ross) was right behind this move, as the fund said goodbye to about $0.4 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 2 funds heading into 2013.

What have insiders been doing with BioScrip Inc. (NASDAQ:BIOS)?

Insider buying is particularly usable when the company in focus has experienced transactions within the past half-year. Over the last six-month time period, BioScrip Inc. (NASDAQ:BIOS) has seen zero unique insiders buying, and 2 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to BioScrip Inc. (NASDAQ:BIOS). These stocks are GNC Holdings Inc (NYSE:GNC), China Nepstar Chain Drugstore Ltd.(ADR) (NYSE:NPD), Rite Aid Corporation (NYSE:RAD), and PharMerica Corporation (NYSE:PMC). This group of stocks are the members of the drug stores industry and their market caps match BIOS’s market cap.

With the returns demonstrated by Insider Monkey’s studies, everyday investors should always pay attention to hedge fund and insider trading activity, and BioScrip Inc. (NASDAQ:BIOS) is an important part of this process.

Click here to learn why you should track hedge funds