National HealthCare Corporation (NHC): Are Hedge Funds Right About This Stock?

Before we spend days researching a stock idea we’d like to take a look at how hedge funds and billionaire investors recently traded that stock. S&P 500 Index returned about 5.2% during the last 12 months ending October 30, 2015. Less than 49% of the stocks in the index outperformed the index. This means you (or a monkey throwing a dart) have less than an even chance of beating the market by randomly picking a stock. On the other hand, the top 30 S&P 500 stocks among hedge funds at the end of September 2014 had an average return of 9.5% during the same period. Sixty three percent of these 30 stocks outperformed the market. Hedge funds had bad stock picks like everyone else. Micron, which lost 50% over this period, was one of hedge funds’ 30 favorite S&P 500 stocks. Anadarko Petroleum was another failed stock pick which lost more than 26%. So, taking cues from hedge funds isn’t a foolproof strategy, but it seems to work on average. In this article, we will take a look at what hedge funds think about National HealthCare Corporation (NYSEMKT:NHC).

National HealthCare Corporation (NYSEMKT:NHC) has seen an increase in activity from the world’s largest hedge funds in recent months. NHC was in an 8 hedge funds’ portfolios at the end of the third quarter of 2015. There were 6 hedge funds in our database with NHC positions 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 Monotype Imaging Holdings Inc. (NASDAQ:TYPE), Denbury Resources Inc. (NYSE:DNR), and Zafgen Inc (NASDAQ:ZFGN) to gather more data points.

With all of this in mind, let’s go over the latest action regarding National HealthCare Corporation (NYSEMKT:NHC).

Hedge fund activity in National HealthCare Corporation (NYSEMKT:NHC)

At the end of the third quarter, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from one quarter earlier. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Jim Simons’ Renaissance Technologies has the number one position in National HealthCare Corporation (NYSEMKT:NHC), worth close to $16 million, accounting for less than 0.1% of its total 13F portfolio. The second most bullish fund manager is Gotham Asset Management, managed by Joel Greenblatt, which holds a $1.3 million position; less than 0.1% of its 13F portfolio is allocated to the company. Some other professional money managers that hold long positions contain Matthew Hulsizer’s PEAK6 Capital Management, and Roger Ibbotson’s Zebra Capital Management.