The elite funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) from the perspective of those elite funds.
Hedge fund interest in Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) 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 Lexington Realty Trust (NYSE:LXP), Lexmark International Inc (NYSE:LXK), and United Natural Foods, Inc. (NASDAQ:UNFI) to gather more data points.
Follow Veradigm Inc. (NASDAQ:MDRX)
Follow Veradigm Inc. (NASDAQ:MDRX)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
www.BillionPhotos.com/Shutterstock.com
Keeping this in mind, let’s take a gander at the new action encompassing Allscripts Healthcare Solutions Inc (NASDAQ:MDRX).
What does the smart money think about Allscripts Healthcare Solutions Inc (NASDAQ:MDRX)?
At Q3’s end, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, unchanged from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Iridian Asset Management, run by David Cohen and Harold Levy, holds the biggest position in Allscripts Healthcare Solutions Inc (NASDAQ:MDRX). As reported in its latest 13F filing, Iridian has a $138.1 million position in the stock, comprising 1.2% of its 13F portfolio. Coming in second is Glenhill Advisors, managed by Glenn J. Krevlin, which holds a $137 million position; the fund has 8.2% of its 13F portfolio invested in the stock. Remaining members of the smart money that are bullish consist of Clifton S. Robbins’s Blue Harbour Group, D. E. Shaw’s D E Shaw and Chuck Royce’s Royce & Associates.
Due to the fact that Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) has experienced unchanged interest from the entirety of the hedge funds we track, we must take a look at a sect of fund managers that slashed their positions entirely in the third quarter. Interestingly, Jean-Marie Eveillard’s First Eagle Investment Management said goodbye to the largest stake of the “upper crust” of funds followed by Insider Monkey, worth close to $60.6 million in stock, and Israel Englander’s Millennium Management was right behind this move, as the fund dropped about $14.2 million worth of MDRX shares. These bearish behaviors are interesting, as total 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 Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) but similarly valued. We will take a look at Lexington Realty Trust (NYSE:LXP), Lexmark International Inc (NYSE:LXK), United Natural Foods, Inc. (NASDAQ:UNFI), and The Medicines Company (NASDAQ:MDCO). This group of stocks’ market caps match that of MDRX.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LXP | 16 | 54051 | 3 |
| LXK | 25 | 303638 | -3 |
| UNFI | 21 | 162679 | 0 |
| MDCO | 27 | 584714 | 1 |
As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $276 million. That figure was $553 million in MDRX’s case. The Medicines Company (NASDAQ:MDCO) is the most popular stock in this table. On the other hand Lexington Realty Trust (NYSE:LXP) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) 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.
Disclosure: none.
