While the market driven by short-term sentiment influenced by uncertainty regarding the future of the interest rate environment in the US, the low commodity prices and the economic turmoil in China, many smart money investors are keeping their optimism regarding the current bull run, while still hedging many of their long positions. However, as we know, big investors usually buy stocks with strong fundamentals, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Allscripts Healthcare Solutions Inc (NASDAQ:MDRX).
Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) was in 24 hedge funds’ portfolios at the end of September. MDRX shareholders have witnessed a decrease in enthusiasm from smart money lately. There were 28 hedge funds in our database with MDRX holdings at the end of the previous quarter. At the end of this article we will also compare MDRX to other stocks including CBL & Associates Properties, Inc. (NYSE:CBL), PRA Health Sciences Inc (NASDAQ:PRAH), and Criteo SA (ADR) (NASDAQ:CRTO) to get a better sense of its popularity.
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To the average investor there are many gauges shareholders employ to size up stocks. A duo of the most underrated gauges are hedge fund and insider trading signals. We have shown that, historically, those who follow the best picks of the top money managers can outperform the broader indices by a very impressive margin (see the details here).
Now, we’re going to take a look at the fresh action surrounding Allscripts Healthcare Solutions Inc (NASDAQ:MDRX).
Hedge fund activity in Allscripts Healthcare Solutions Inc (NASDAQ:MDRX)
At Q3’s end, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of -14% from the previous quarter. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Iridian Asset Management, managed by David Cohen and Harold Levy, holds the largest position in Allscripts Healthcare Solutions Inc (NASDAQ:MDRX). Iridian Asset Management has a $196.9 million position in the stock, comprising 1.7% of its 13F portfolio. On Iridian Asset Management’s heels is Clifton S. Robbins of Blue Harbour Group, with a $178.8 million position; 5.6% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that hold long positions include Glenn J. Krevlin’s Glenhill Advisors, D E Shaw and Justin John Ferayorni’s Tamarack Capital Management.
Seeing as Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) has experienced falling interest from the smart money, we can see that there lies a certain “tier” of money managers who sold off their entire stakes in the third quarter. Intriguingly, Jim Simons’ Renaissance Technologies said goodbye to the biggest stake of all the hedgies watched by Insider Monkey, totaling close to $19.8 million in call options., and Israel Englander’s Millennium Management was right behind this move, as the fund cut about $4.1 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 4 funds in the third quarter.
Let’s now review hedge fund activity in other stocks similar to Allscripts Healthcare Solutions Inc (NASDAQ:MDRX). These stocks are CBL & Associates Properties, Inc. (NYSE:CBL), PRA Health Sciences Inc (NASDAQ:PRAH), Criteo SA (ADR) (NASDAQ:CRTO), and Medidata Solutions Inc (NASDAQ:MDSO). This group of stocks’ market valuations are closest to MDRX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CBL | 21 | 137715 | 3 |
| PRAH | 11 | 37629 | 0 |
| CRTO | 20 | 264518 | -1 |
| MDSO | 17 | 72845 | 0 |
As you can see these stocks had an average of 17.25 hedge funds with bullish positions and the average amount invested in these stocks was $128 million. That figure was $686 million in MDRX’s case. CBL & Associates Properties, Inc. (NYSE:CBL) is the most popular stock in this table. On the other hand PRA Health Sciences Inc (NASDAQ:PRAH) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
