How Almost Family Inc (AFAM) Stacks Up Against Similarly Valued Stocks

The successful 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 Almost Family Inc (NASDAQ:AFAM) from the perspective of those successful funds.

Almost Family Inc (NASDAQ:AFAM) investors should be aware of an increase in hedge fund interest in recent months. AFAM was in 15 hedge funds’ portfolios at the end of September. There were 14 hedge funds in our database with AFAM positions at the end of the previous quarter. 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 Dorchester Minerals LP (NASDAQ:DMLP), Lindblad Expeditions Holdings Inc (NASDAQ:LIND), and American Vanguard Corp. (NYSE:AVD) to gather more data points.

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.

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With all of this in mind, let’s take a look at the fresh action surrounding Almost Family Inc (NASDAQ:AFAM).

What have hedge funds been doing with Almost Family Inc (NASDAQ:AFAM)?

At Q3’s end, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of 7% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards AFAM over the last 5 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, North Tide Capital, led by Conan Laughlin, holds the number one position in Almost Family Inc (NASDAQ:AFAM). North Tide Capital has a $25.7 million position in the stock, comprising 2.8% of its 13F portfolio. On North Tide Capital’s heels is Millennium Management, led by Israel Englander, which holds a $6.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism encompass Ken Fisher’s Fisher Asset Management, Jim Simons’s Renaissance Technologies and D. E. Shaw’s D E Shaw. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

As one would reasonably expect, key money managers were breaking ground themselves. Citadel Investment Group, led by Ken Griffin, created the largest position in Almost Family Inc (NASDAQ:AFAM). Citadel Investment Group had $0.3 million invested in the company at the end of the quarter. Joel Greenblatt’s Gotham Asset Management also initiated a $0.2 million position during the quarter. The only other fund with a new position in the stock is Matthew Tewksbury’s Stevens Capital Management.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Almost Family Inc (NASDAQ:AFAM) but similarly valued. We will take a look at Dorchester Minerals LP (NASDAQ:DMLP), Lindblad Expeditions Holdings Inc (NASDAQ:LIND), American Vanguard Corp. (NYSE:AVD), and Matrix Service Co (NASDAQ:MTRX). This group of stocks’ market valuations are closest to AFAM’s market valuation.

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $37 million. That figure was $43 million in AFAM’s case. Matrix Service Co (NASDAQ:MTRX) is the most popular stock in this table. On the other hand Dorchester Minerals LP (NASDAQ:DMLP) is the least popular one with only 4 bullish hedge fund positions. Almost Family Inc (NASDAQ:AFAM) 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. In this regard MTRX might be a better candidate to consider taking a long position in.