Should You Buy Healthcare Services Group, Inc. (HCSG)?

Is Healthcare Services Group, Inc. (NASDAQ:HCSG) a good investment now? The best stock pickers are becoming more confident. The number of bullish hedge fund positions improved by 2 recently.

In today’s marketplace, there are a multitude of gauges market participants can use to analyze stocks. Some of the most innovative are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best fund managers can outpace their index-focused peers by a healthy margin (see just how much).

Equally as beneficial, optimistic insider trading activity is another way to break down the world of equities. Obviously, there are a number of reasons for an insider to downsize shares of his or her company, but just one, very clear reason why they would buy. Several empirical studies have demonstrated the valuable potential of this strategy if piggybackers know what to do (learn more here).

With these “truths” under our belt, it’s important to take a gander at the recent action surrounding Healthcare Services Group, Inc. (NASDAQ:HCSG).

Hedge fund activity in Healthcare Services Group, Inc. (NASDAQ:HCSG)

Heading into Q2, a total of 10 of the hedge funds we track were bullish in this stock, a change of 25% from one quarter earlier. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their holdings considerably.

When looking at the hedgies we track, Chuck Royce’s Royce & Associates had the biggest position in Healthcare Services Group, Inc. (NASDAQ:HCSG), worth close to $21 million, accounting for 0.1% of its total 13F portfolio. On Royce & Associates’s heels is Richard Driehaus of Driehaus Capital, with a $7.1 million position; 0.3% of its 13F portfolio is allocated to the company. Remaining peers with similar optimism include Ken Griffin’s Citadel Investment Group, Jim Simons’s Renaissance Technologies and Brian Ashford-Russell and Tim Woolley’s Polar Capital.

With a general bullishness amongst the heavyweights, specific money managers were leading the bulls’ herd. Renaissance Technologies, managed by Jim Simons, assembled the biggest position in Healthcare Services Group, Inc. (NASDAQ:HCSG). Renaissance Technologies had 1.3 million invested in the company at the end of the quarter. James Dondero’s Highland Capital Management also initiated a $0.8 million position during the quarter. The other funds with new positions in the stock are Joel Greenblatt’s Gotham Asset Management and Mike Vranos’s Ellington.

What do corporate executives and insiders think about Healthcare Services Group, Inc. (NASDAQ:HCSG)?

Insider buying is most useful when the company we’re looking at has experienced transactions within the past six months. Over the last half-year time period, Healthcare Services Group, Inc. (NASDAQ:HCSG) has experienced zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Healthcare Services Group, Inc. (NASDAQ:HCSG). These stocks are Shutterstock Inc (NYSE:SSTK), Giant Interactive Group Inc (ADR) (NYSE:GA), Fair Isaac Corporation (NYSE:FICO), Zillow Inc (NASDAQ:Z), and The Advisory Board Company (NASDAQ:ABCO). This group of stocks are in the business services industry and their market caps match HCSG’s market cap.

With the results shown by our studies, everyday investors must always monitor hedge fund and insider trading sentiment, and Healthcare Services Group, Inc. (NASDAQ:HCSG) is an important part of this process.

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