Should You Buy Cross Country Healthcare, Inc. (CCRN)?

At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.

Cross Country Healthcare, Inc. (NASDAQ:CCRN) investors should be aware of an increase in hedge fund interest in recent months. CCRN was in 20 hedge funds’ portfolios at the end of the third quarter of 2015. There were 16 hedge funds in our database with CCRN positions at the end of the previous quarter. At the end of this article we will also compare CCRN to other stocks including Ultratech, Inc. (NASDAQ:UTEK), MFS Multimarket Income Trust (NYSE:MMT), and GSI Group Inc. (USA) (NASDAQ:GSIG) to get a better sense of its popularity.

Keeping this in mind, we’re going to take a gander at the new action encompassing Cross Country Healthcare, Inc. (NASDAQ:CCRN).

How have hedgies been trading Cross Country Healthcare, Inc. (NASDAQ:CCRN)?

Heading into Q4, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Camber Capital Management, managed by Stephen DuBois, holds the most valuable position in Cross Country Healthcare, Inc. (NASDAQ:CCRN). Camber Capital Management has a $20.3 million position in the stock, comprising 1.7% of its 13F portfolio. On Camber Capital Management’s heels is Millennium Management, managed by Israel Englander, which holds a $14.3 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish contain Richard Driehaus’ Driehaus Capital, Columbus Circle Investors and Lee Munder’s Lee Munder Capital Group.

Now, some big names have been driving this bullishness. Columbus Circle Investors assembled the most outsized position in Cross Country Healthcare, Inc. (NASDAQ:CCRN). Columbus Circle Investors had $9.2 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also made a $1 million investment in the stock during the quarter. The following funds were also among the new CCRN investors: Mike Vranos’s Ellington, Chao Ku’s Nine Chapters Capital Management, and Peter Muller’s PDT Partners.

Let’s go over hedge fund activity in other stocks similar to Cross Country Healthcare, Inc. (NASDAQ:CCRN). These stocks are Ultratech, Inc. (NASDAQ:UTEK), MFS Multimarket Income Trust (NYSE:MMT), GSI Group Inc. (USA) (NASDAQ:GSIG), and Pacific Premier Bancorp, Inc. (NASDAQ:PPBI). This group of stocks’ market valuations are similar to CCRN’s market valuation.

As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $46 million. That figure was $86 million in CCRN’s case. GSI Group Inc. (USA) (NASDAQ:GSIG) is the most popular stock in this table. On the other hand MFS Multimarket Income Trust (NYSE:MMT) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Cross Country Healthcare, Inc. (NASDAQ:CCRN) 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.