Here is What Hedge Funds Think About HCA Holdings Inc (HCA)

HCA Holdings Inc (NYSE:HCA) was in 73 hedge funds’ portfolio at the end of the first quarter of 2013. HCA shareholders have witnessed an increase in support from the world’s most elite money managers recently. There were 64 hedge funds in our database with HCA positions at the end of the previous quarter.

In the eyes of most shareholders, hedge funds are perceived as worthless, old financial vehicles of the past. While there are greater than 8000 funds trading today, we choose to focus on the upper echelon of this group, around 450 funds. It is estimated that this group has its hands on most of the smart money’s total capital, and by watching their best stock picks, we have unearthed a few investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year 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 23.3 percentage points in 8 months (check out a sample of our picks).

Equally as key, optimistic insider trading activity is another way to parse down the stock market universe. Just as you’d expect, there are plenty of stimuli for an insider to get rid of shares of his or her company, but just one, very simple reason why they would initiate a purchase. Many empirical studies have demonstrated the market-beating potential of this method if you understand what to do (learn more here).

With all of this in mind, it’s important to take a look at the latest action surrounding HCA Holdings Inc (NYSE:HCA).

What have hedge funds been doing with HCA Holdings Inc (NYSE:HCA)?

Heading into Q2, a total of 73 of the hedge funds we track held long positions in this stock, a change of 14% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their holdings meaningfully.

According to our comprehensive database, Glenview Capital, managed by Larry Robbins, holds the largest position in HCA Holdings Inc (NYSE:HCA). Glenview Capital has a $360.9 million position in the stock, comprising 3.8% of its 13F portfolio. On Glenview Capital’s heels is Maverick Capital, managed by Lee Ainslie, which held a $290.6 million position; 3.8% of its 13F portfolio is allocated to the stock. Some other hedgies that hold long positions include Kenneth Mario Garschina’s Mason Capital Management, John Griffin’s Blue Ridge Capital and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Consequently, some big names were breaking ground themselves. Maverick Capital, managed by Lee Ainslie, created the biggest position in HCA Holdings Inc (NYSE:HCA). Maverick Capital had 290.6 million invested in the company at the end of the quarter. Daniel S. Och’s OZ Management also made a $40.6 million investment in the stock during the quarter. The other funds with brand new HCA positions are Keith Meister’s Corvex Capital, Dmitry Balyasny’s Balyasny Asset Management, and Van Schreiber’s Bennett Lawrence Management.

What do corporate executives and insiders think about HCA Holdings Inc (NYSE:HCA)?

Insider trading activity, especially when it’s bullish, is best served when the company we’re looking at has experienced transactions within the past 180 days. Over the latest six-month time frame, HCA Holdings Inc (NYSE:HCA) has seen zero unique insiders purchasing, and 15 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to HCA Holdings Inc (NYSE:HCA). These stocks are LifePoint Hospitals, Inc. (NASDAQ:LPNT), Health Management Associates Inc (NYSE:HMA), Community Health Systems (NYSE:CYH), Tenet Healthcare Corp (NYSE:THC), and Universal Health Services, Inc. (NYSE:UHS). This group of stocks are in the hospitals industry and their market caps match HCA’s market cap.

With the results exhibited by our studies, everyday investors should always pay attention to hedge fund and insider trading sentiment, and HCA Holdings Inc (NYSE:HCA) is an important part of this process.

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