LHC Group, Inc. (LHCG): Insiders Are Buying, Should You?

Is LHC Group, Inc. (NASDAQ:LHCG) a healthy stock for your portfolio? Investors who are in the know are selling. The number of bullish hedge fund bets went down by 1 lately.

In the 21st century investor’s toolkit, there are many metrics market participants can use to monitor Mr. Market. A couple of the most innovative are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top investment managers can beat the broader indices by a healthy amount (see just how much).

Equally as beneficial, optimistic insider trading activity is another way to break down the investments you’re interested in. Just as you’d expect, there are lots of stimuli for an insider to sell shares of his or her company, but just one, very clear reason why they would buy. Several academic studies have demonstrated the useful potential of this strategy if shareholders know what to do (learn more here).

With these “truths” under our belt, let’s take a gander at the recent action regarding LHC Group, Inc. (NASDAQ:LHCG).

How have hedgies been trading LHC Group, Inc. (NASDAQ:LHCG)?

Heading into Q2, a total of 7 of the hedge funds we track held long positions in this stock, a change of -13% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their holdings significantly.

According to our comprehensive database, Coliseum Capital, managed by Christopher Shackelton and Adam Gray, holds the largest position in LHC Group, Inc. (NASDAQ:LHCG). Coliseum Capital has a $54.8 million position in the stock, comprising 31.4% of its 13F portfolio. Coming in second is AQR Capital Management, managed by Cliff Asness, which held a $4.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers that are bullish include Richard C. Patton’s Courage Capital, Joel Greenblatt’s Gotham Asset Management and John Overdeck and David Siegel’s Two Sigma Advisors.

Since LHC Group, Inc. (NASDAQ:LHCG) has experienced bearish sentiment from the smart money, it’s safe to say that there lies a certain “tier” of funds who were dropping their full holdings at the end of the first quarter. Intriguingly, Peter Algert and Kevin Coldiron’s Algert Coldiron Investors said goodbye to the largest stake of the 450+ funds we key on, totaling about $0.4 million in stock., and Jim Simons of Renaissance Technologies was right behind this move, as the fund dropped about $0.4 million worth. These moves are important to note, as total hedge fund interest fell by 1 funds at the end of the first quarter.

What have insiders been doing with LHC Group, Inc. (NASDAQ:LHCG)?

Bullish insider trading is at its handiest when the company in focus has experienced transactions within the past 180 days. Over the latest six-month time period, LHC Group, Inc. (NASDAQ:LHCG) has seen 1 unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

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

With the results demonstrated by the aforementioned strategies, retail investors must always monitor hedge fund and insider trading activity, and LHC Group, Inc. (NASDAQ:LHCG) applies perfectly to this mantra.

Click here to learn why you should track hedge funds