Is Almost Family, Inc. (AFAM) Going to Burn These Hedge Funds?

Almost Family, Inc. (NASDAQ:AFAM) was in 10 hedge funds’ portfolio at the end of the first quarter of 2013. AFAM shareholders have witnessed an increase in activity from the world’s largest hedge funds lately. There were 9 hedge funds in our database with AFAM holdings at the end of the previous quarter.

In today’s marketplace, there are tons of metrics market participants can use to monitor stocks. Some of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite hedge fund managers can outclass their index-focused peers by a healthy margin (see just how much).

Equally as integral, bullish insider trading sentiment is another way to parse down the world of equities. There are many incentives for a corporate insider to sell shares of his or her company, but only one, very clear reason why they would initiate a purchase. Several empirical studies have demonstrated the impressive potential of this method if “monkeys” know what to do (learn more here).

With all of this in mind, it’s important to take a look at the recent action encompassing Almost Family, Inc. (NASDAQ:AFAM).

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

Heading into Q2, a total of 10 of the hedge funds we track were long in this stock, a change of 11% from the previous quarter. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their holdings considerably.

When looking at the hedgies we track, PAR Capital Management, managed by Paul Reeder and Edward Shapiro, holds the most valuable position in Almost Family, Inc. (NASDAQ:AFAM). PAR Capital Management has a $5.4 million position in the stock, comprising 0.2% of its 13F portfolio. Coming in second is David Dreman of Dreman Value Management, with a $3 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other peers with similar optimism include Richard C. Patton’s Courage Capital, D. E. Shaw’s D E Shaw and Matthew Hulsizer’s PEAK6 Capital Management.

Now, key money managers were breaking ground themselves. Dreman Value Management, managed by David Dreman, assembled the biggest position in Almost Family, Inc. (NASDAQ:AFAM). Dreman Value Management had 3 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also made a $0.2 million investment in the stock during the quarter.

How have insiders been trading Almost Family, Inc. (NASDAQ:AFAM)?

Bullish insider trading is best served when the company in question has experienced transactions within the past half-year. Over the latest half-year time frame, Almost Family, Inc. (NASDAQ:AFAM) has seen zero unique insiders buying, and 1 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Almost Family, Inc. (NASDAQ:AFAM). These stocks are Chemed Corporation (NYSE:CHE), LHC Group, Inc. (NASDAQ:LHCG), Amedisys Inc (NASDAQ:AMED), Gentiva Health Services, Inc. (NASDAQ:GTIV), and Addus Homecare Corporation (NASDAQ:ADUS). This group of stocks belong to the home health care industry and their market caps are similar to AFAM’s market cap.