Is eHealth, Inc. (EHTH) A Good Stock To Buy?

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on eHealth, Inc. (NASDAQ:EHTH).

Is eHealth, Inc. (NASDAQ:EHTH) a great investment today? Hedge funds are in a bullish mood. The number of bullish hedge fund positions improved by 3 in recent months. EHTH was in 15 hedge funds’ portfolios at the end of the third quarter of 2015. There were 12 hedge funds in our database with EHTH holdings 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 OvaScience Inc (NASDAQ:OVAS), Bel Fuse, Inc. (NASDAQ:BELFB), and Independence Realty Trust Inc (NYSEMKT:IRT) to gather more data points.

If you’d ask most traders, hedge funds are assumed to be worthless, outdated financial vehicles of the past. While there are greater than 8000 funds trading at present, Our researchers hone in on the upper echelon of this group, around 700 funds. It is estimated that this group of investors administer most of all hedge funds’ total capital, and by observing their best investments, Insider Monkey has deciphered various investment strategies that have historically outrun the broader indices. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points per annum for a decade in their back tests.

With all of this in mind, we’re going to take a look at the new action encompassing eHealth, Inc. (NASDAQ:EHTH).

How are hedge funds trading eHealth, Inc. (NASDAQ:EHTH)?

Heading into Q4, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from the second quarter. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Deerfield Management, managed by James E. Flynn, holds the number one position in eHealth, Inc. (NASDAQ:EHTH). Deerfield Management has a $41.8 million position in the stock, comprising 1.6% of its 13F portfolio. The second largest stake is held by OrbiMed Advisors, led by Samuel Isaly, holding a $16.7 million position; 0.2% of its 13F portfolio is allocated to the stock. Remaining members of the smart money with similar optimism contain Chuck Royce’s Royce & Associates, J. Carlo Cannell’s Cannell Capital and Israel Englander’s Millennium Management.

With a general bullishness amongst the heavyweights, key hedge funds have jumped into eHealth, Inc. (NASDAQ:EHTH) headfirst. Highbridge Capital Management, managed by Glenn Russell Dubin, assembled the most outsized position in eHealth, Inc. (NASDAQ:EHTH). Highbridge Capital Management had $0.6 million invested in the company at the end of the quarter. Peter Algert and Kevin Coldiron’s Algert Coldiron Investors also initiated a $0.6 million position during the quarter. The other funds with brand new EHTH positions are Peter Muller’s PDT Partners, Mike Vranos’s Ellington, and Chao Ku’s Nine Chapters Capital Management.

Let’s check out hedge fund activity in other stocks similar to eHealth, Inc. (NASDAQ:EHTH). We will take a look at OvaScience Inc (NASDAQ:OVAS), Bel Fuse, Inc. (NASDAQ:BELFB), Independence Realty Trust Inc (NYSEMKT:IRT), and Safe Bulkers, Inc. (NYSE:SB). All of these stocks’ market caps are similar to EHTH’s market cap.

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 $39 million, compared to $87 million in EHTH’s case. OvaScience Inc (NASDAQ:OVAS) is the most popular stock in this table with a total of 13 funds reporting long positions. On the other hand Safe Bulkers, Inc. (NYSE:SB) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks eHealth, Inc. (NASDAQ:EHTH) 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.