To most stock holders, hedge funds are seen as slow, outdated financial tools of the past. While there are greater than 8000 funds in operation at the moment, we at Insider Monkey choose to focus on the upper echelon of this club, about 450 funds. Most estimates calculate that this group oversees the majority of the hedge fund industry’s total capital, and by tracking their best stock picks, we have deciphered a number of investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 beaten the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).
Equally as key, positive insider trading activity is another way to parse down the world of equities. Obviously, there are lots of stimuli for a bullish insider to drop shares of his or her company, but only one, very simple reason why they would behave bullishly. Plenty of academic studies have demonstrated the valuable potential of this tactic if you understand what to do (learn more here).
With all of this in mind, we’re going to take a peek at the latest action encompassing Molina Healthcare, Inc. (NYSE:MOH).
What does the smart money think about Molina Healthcare, Inc. (NYSE:MOH)?
At year’s end, a total of 19 of the hedge funds we track held long positions in this stock, a change of 6% from the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their holdings meaningfully.
When looking at the hedgies we track, James E. Flynn’s Deerfield Management had the most valuable position in Molina Healthcare, Inc. (NYSE:MOH), worth close to $56 million, accounting for 3.1% of its total 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $46 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other hedgies that hold long positions include Jacob Gottlieb’s Visium Asset Management, SAC Subsidiary’s CR Intrinsic Investors and Israel Englander’s Millennium Management.
With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. OrbiMed Advisors, managed by Samuel Isaly, established the biggest position in Molina Healthcare, Inc. (NYSE:MOH). OrbiMed Advisors had 5 million invested in the company at the end of the quarter. Barton Biggs’s Traxis Partners also made a $3 million investment in the stock during the quarter. The following funds were also among the new MOH investors: Jacob Gottlieb’s Visium Asset Management, Glenn Russell Dubin’s Highbridge Capital Management, and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.
What have insiders been doing with Molina Healthcare, Inc. (NYSE:MOH)?
Insider purchases made by high-level executives is most useful when the company in focus has seen transactions within the past half-year. Over the last half-year time frame, Molina Healthcare, Inc. (NYSE:MOH) has experienced 1 unique insiders buying, and 6 insider sales (see the details of insider trades here).
With the returns shown by the aforementioned time-tested strategies, everyday investors must always watch hedge fund and insider trading activity, and Molina Healthcare, Inc. (NYSE:MOH) is no exception.
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