Here is What Hedge Funds Think About Chemed Corporation (CHE)

Hedge funds run by legendary names like Nelson Peltz and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant out-performance. That’s why we pay special attention to hedge fund activity in these stocks.

Is Chemed Corporation (NYSE:CHE) the right pick for your portfolio? The best stock pickers are getting more optimistic. The number of bullish hedge fund bets advanced by 3 recently. 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 FS Investment Corporation (NYSE:FSIC), DSW Inc. (NYSE:DSW), and INC Research Holdings Inc (NASDAQ:INCR) to gather more data points.

Now, let’s analyze the fresh action surrounding Chemed Corporation (NYSE:CHE).

Hedge fund activity in Chemed Corporation (NYSE:CHE)

Heading into Q4, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of 27% from one quarter earlier. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, GAMCO Investors, managed by Mario Gabelli, holds the largest position in Chemed Corporation (NYSE:CHE). GAMCO Investors has a $88.5 million position in the stock, comprising 0.6% of its 13F portfolio. The second most bullish fund manager is Fisher Asset Management, managed by Ken Fisher, which holds a $73.9 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other peers that hold long positions consist of Chuck Royce’s Royce & Associates, Israel Englander’s Millennium Management and Krishen Sud’s Sivik Global Healthcare.

With a general bullishness amongst the heavyweights, specific money managers were leading the bulls’ herd. Millennium Management, managed by Israel Englander, assembled the largest position in Chemed Corporation (NYSE:CHE). Millennium Management had $4.1 million invested in the company at the end of the quarter. Krishen Sud’s Sivik Global Healthcare also made a $2.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Paul Tudor Jones’s Tudor Investment Corp, Matthew Tewksbury’s Stevens Capital Management, and Michael Platt and William Reeves’s BlueCrest Capital Mgmt..

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Chemed Corporation (NYSE:CHE) but similarly valued. We will take a look at FS Investment Corporation (NYSE:FSIC), DSW Inc. (NYSE:DSW), INC Research Holdings Inc (NASDAQ:INCR), and Steelcase Inc. (NYSE:SCS). All of these stocks’ market caps are closest to CHE’s market cap.

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 $148 million. That figure was $190 million in CHE’s case. DSW Inc. (NYSE:DSW) is the most popular stock in this table. On the other hand FS Investment Corporation (NYSE:FSIC) is the least popular one with only 8 bullish hedge fund positions. Chemed Corporation (NYSE:CHE) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard DSW might be a better candidate to consider a long position.