Is Hill-Rom Holdings, Inc. (NYSE:HRC) a marvelous investment today? Prominent investors are in a bullish mood. The number of long hedge fund positions moved up by 1 lately.
According to most stock holders, hedge funds are viewed as worthless, outdated financial tools of the past. While there are greater than 8000 funds in operation at present, we at Insider Monkey hone in on the upper echelon of this club, close to 450 funds. It is estimated that this group oversees the majority of the smart money’s total capital, and by tracking their top picks, we have uncovered a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per 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 trumped the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Just as key, bullish insider trading sentiment is another way to parse down the marketplace. Just as you’d expect, there are a number of incentives for an executive to drop shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the valuable potential of this method if you know where to look (learn more here).
Consequently, let’s take a gander at the recent action regarding Hill-Rom Holdings, Inc. (NYSE:HRC).
What have hedge funds been doing with Hill-Rom Holdings, Inc. (NYSE:HRC)?
At year’s end, a total of 17 of the hedge funds we track were long in this stock, a change of 6% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes substantially.
When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the largest position in Hill-Rom Holdings, Inc. (NYSE:HRC). Royce & Associates has a $61 million position in the stock, comprising 0.2% of its 13F portfolio. On Royce & Associates’s heels is Ken Fisher of Fisher Asset Management, with a $52 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other peers with similar optimism include Cliff Asness’s AQR Capital Management, David Dreman’s Dreman Value Management and D. E. Shaw’s D E Shaw.
As industrywide interest jumped, key money managers have been driving this bullishness. Highbridge Capital Management, managed by Glenn Russell Dubin, initiated the largest position in Hill-Rom Holdings, Inc. (NYSE:HRC). Highbridge Capital Management had 11 million invested in the company at the end of the quarter. Barton Biggs’s Traxis Partners also initiated a $1 million position during the quarter. The only other fund with a brand new HRC position is Charles Davidson’s Wexford Capital.
What do corporate executives and insiders think about Hill-Rom Holdings, Inc. (NYSE:HRC)?
Insider purchases made by high-level executives is most useful when the company we’re looking at has experienced transactions within the past half-year. Over the latest 180-day time period, Hill-Rom Holdings, Inc. (NYSE:HRC) has experienced zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
With the results exhibited by Insider Monkey’s strategies, retail investors should always watch hedge fund and insider trading activity, and Hill-Rom Holdings, Inc. (NYSE:HRC) shareholders fit into this picture quite nicely.
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