The government requires hedge funds and wealthy investors that crossed the $100 million equity holdings threshold are required to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31. We at Insider Monkey have made an extensive database of nearly 750 of those elite funds and famous investors’ filings. In this article, we analyze how these elite funds and prominent investors traded HCA Healthcare Inc (NYSE:HCA) based on those filings.
HCA Healthcare Inc (NYSE:HCA) investors should pay attention to a decrease in enthusiasm from smart money lately. Our calculations also showed that hca isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Let’s take a look at the latest hedge fund action regarding HCA Healthcare Inc (NYSE:HCA).
What does the smart money think about HCA Healthcare Inc (NYSE:HCA)?
At Q1’s end, a total of 51 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -9% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards HCA over the last 15 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in HCA Healthcare Inc (NYSE:HCA) was held by Glenview Capital, which reported holding $553.3 million worth of stock at the end of March. It was followed by Arrowstreet Capital with a $526.7 million position. Other investors bullish on the company included AQR Capital Management, GLG Partners, and Two Sigma Advisors.
Judging by the fact that HCA Healthcare Inc (NYSE:HCA) has faced a decline in interest from hedge fund managers, logic holds that there is a sect of funds who were dropping their positions entirely last quarter. Intriguingly, Stephen DuBois’s Camber Capital Management sold off the largest stake of the “upper crust” of funds watched by Insider Monkey, comprising about $31.1 million in stock. Samuel Isaly’s fund, OrbiMed Advisors, also dumped its stock, about $9.4 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 5 funds last quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as HCA Healthcare Inc (NYSE:HCA) but similarly valued. We will take a look at Banco de Chile (NYSE:BCH), Brookfield Asset Management Inc. (NYSE:BAM), ServiceNow Inc (NYSE:NOW), and Waste Management, Inc. (NYSE:WM). This group of stocks’ market values are similar to HCA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BCH | 4 | 73861 | 0 |
| BAM | 26 | 824917 | 1 |
| NOW | 65 | 3793991 | 4 |
| WM | 33 | 3092288 | -3 |
| Average | 32 | 1946264 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32 hedge funds with bullish positions and the average amount invested in these stocks was $1946 million. That figure was $2668 million in HCA’s case. ServiceNow Inc (NYSE:NOW) is the most popular stock in this table. On the other hand Banco de Chile (NYSE:BCH) is the least popular one with only 4 bullish hedge fund positions. HCA Healthcare Inc (NYSE:HCA) is not the most popular stock in this group but hedge fund interest is still above average. 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 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately HCA wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on HCA were disappointed as the stock returned -6% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
