Hedge funds run by legendary names like Nelson Peltz and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant out-performance. That’s why we pay special attention to hedge fund activity in these stocks.
Kindred Healthcare, Inc. (NYSE:KND) has seen an increase in hedge fund interest lately. 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 CONMED Corporation (NASDAQ:CNMD), Brink’S Co (NYSE:BCO), and RealPage, Inc. (NASDAQ:RP) to gather more data points.
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To the average investor, there are several metrics stock market investors can use to size up their holdings. A pair of the most underrated metrics are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the top picks of the top hedge fund managers can outclass the market by a superb margin (see the details here).
Now, we’re going to take a look at the latest action surrounding Kindred Healthcare, Inc. (NYSE:KND).
How have hedgies been trading Kindred Healthcare, Inc. (NYSE:KND)?
At the end of September, a total of 35 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 9% from the previous quarter. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Conan Laughlin’s North Tide Capital has the biggest position in Kindred Healthcare, Inc. (NYSE:KND), worth close to $78.8 million, accounting for 6.9% of its total 13F portfolio. Sitting at the No. 2 spot is Ross Margolies of Stelliam Investment Management, with a $58.3 million position; the fund has 1.4% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism encompass Clint Carlson’s Carlson Capital, Don Morgan’s Brigade Capital, and Jacob Gottlieb’s Visium Asset Management.
Now, some big names were leading the bulls’ herd. Visium Asset Management created the most outsized position in Kindred Healthcare, Inc. (NYSE:KND). Visium Asset Management had $29.2 million invested in the company at the end of the quarter. Larry Robbins’ Glenview Capital also made a $27 million investment in the stock during the quarter. The other funds with new positions in the stock are David Keidan’s Buckingham Capital Management, John Croghan and Richard Fradin’s Rail-Splitter Capital Management, and Benjamin A. Smith’s Laurion Capital Management.
Let’s now review hedge fund activity in other stocks similar to Kindred Healthcare, Inc. (NYSE:KND). We will take a look at CONMED Corporation (NASDAQ:CNMD), Brink’S Co (NYSE:BCO), RealPage, Inc. (NASDAQ:RP), and Drew Industries, Inc. (NYSE:DW). All of these stocks’ market caps are closest to Kindred Healthcare, Inc. (NYSE:KND)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CNMD | 19 | 249363 | 2 |
| BCO | 17 | 408917 | -6 |
| RP | 14 | 278864 | -1 |
| DW | 12 | 64045 | -3 |
As you can see, these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $250 million. That figure was $407 million in Kindred Healthcare, Inc. (NYSE:KND)’s case. CONMED Corporation (NASDAQ:CNMD) is the most popular stock in this table. On the other hand, Drew Industries, Inc. (NYSE:DW) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks, Kindred Healthcare, Inc. (NYSE:KND) 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.
