Does Five Star Senior Living Inc. (NASDAQ:FVE) represent a good buying opportunity at the moment? Let’s quickly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on satellite photos and other research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail inconceivably on some occasions, but net net their stock picks have been generating superior risk-adjusted returns on average over the years.
Five Star Senior Living Inc. (NASDAQ:FVE) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 4 hedge funds’ portfolios at the end of September. 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 Intec Pharma Ltd (NASDAQ:NTEC), Nuvectra Corporation (NASDAQ:NVTR), and Microbot Medical Inc. (NASDAQ:MBOT) to gather more data points. Our calculations also showed that FVE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
At the moment there are plenty of metrics shareholders can use to value stocks. A duo of the most underrated metrics are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the best fund managers can beat the market by a significant margin (see the details here).
John Overdeck of Two Sigma Advisors
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. Now we’re going to go over the key hedge fund action regarding Five Star Senior Living Inc. (NASDAQ:FVE).
What have hedge funds been doing with Five Star Senior Living Inc. (NASDAQ:FVE)?
At Q3’s end, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards FVE over the last 17 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies has the largest position in Five Star Senior Living Inc. (NASDAQ:FVE), worth close to $0.6 million, comprising less than 0.1%% of its total 13F portfolio. On Renaissance Technologies’s heels is Minerva Advisors, managed by David P. Cohen, which holds a $0.6 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism comprise Ken Griffin’s Citadel Investment Group, John Overdeck and David Siegel’s Two Sigma Advisors and . In terms of the portfolio weights assigned to each position Minerva Advisors allocated the biggest weight to Five Star Senior Living Inc. (NASDAQ:FVE), around 0.33% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, setting aside 0.0005 percent of its 13F equity portfolio to FVE.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Five Star Senior Living Inc. (NASDAQ:FVE) but similarly valued. We will take a look at Intec Pharma Ltd (NASDAQ:NTEC), Nuvectra Corporation (NASDAQ:NVTR), Microbot Medical Inc. (NASDAQ:MBOT), and Kazia Therapeutics Limited (NASDAQ:KZIA). All of these stocks’ market caps are closest to FVE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NTEC | 5 | 1156 | -6 |
| NVTR | 11 | 1566 | 0 |
| MBOT | 2 | 1510 | -1 |
| KZIA | 2 | 178 | 0 |
| Average | 5 | 1103 | -1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $1 million in FVE’s case. Nuvectra Corporation (NASDAQ:NVTR) is the most popular stock in this table. On the other hand Microbot Medical Inc. (NASDAQ:MBOT) is the least popular one with only 2 bullish hedge fund positions. Five Star Senior Living Inc. (NASDAQ:FVE) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately FVE wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); FVE investors were disappointed as the stock returned 5.3% during the first two months of the fourth quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
