Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those successful funds in these small-cap stocks. In the following paragraphs, we analyze TeamHealth Holdings Inc (NYSE:TMH) from the perspective of those successful funds.
Is TeamHealth Holdings Inc (NYSE:TMH) a superb investment now? The smart money is unambiguously becoming less hopeful. The number of bullish hedge fund bets that are revealed through 13F filings shrunk by 5 lately. TMH was in 20 hedge funds’ portfolios at the end of September. There were 25 hedge funds in our database with TMH 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 Domtar Corp (USA) (NYSE:UFS), Washington Federal Inc. (NASDAQ:WAFD), and Drew Industries, Inc. (NYSE:DW) to gather more data points.
Follow Team Health Holdings Inc. (NYSE:TMH)
Follow Team Health Holdings Inc. (NYSE:TMH)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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How have hedgies been trading TeamHealth Holdings Inc (NYSE:TMH)?
At Q3’s end, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a 20% fall from the previous quarter, pushing bullish hedge fund positions to a yearly low. The graph below displays the number of hedge funds with bullish position in TMH over the last 5 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, JANA Partners, led by Barry Rosenstein, holds the most valuable position in TeamHealth Holdings Inc (NYSE:TMH). JANA Partners has a $191.8 million position in the stock, comprising 3.4% of its 13F portfolio. The second most bullish fund manager is Corvex Capital, led by Keith Meister, which holds a $101.5 million position; the fund has 1.9% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism encompass Scott Ferguson’s Sachem Head Capital, Alan Fournier’s Pennant Capital Management, and Steven Tananbaum’s GoldenTree Asset Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
We already know that not all hedge funds are bullish on the stock and some hedge funds actually cashed in their positions entirely. Interestingly, Daniel S. Och’s OZ Management cashed in the largest investment of the 700 funds watched by Insider Monkey, worth about $9.5 million in stock, and Andrew Sandler’s Sandler Capital Management was right behind this move, as the fund dumped about $8.1 million worth of shares.
Let’s go over hedge fund activity in other stocks similar to Team Health Holdings LLC (NYSE:TMH). These stocks are Domtar Corp (USA) (NYSE:UFS), Washington Federal Inc. (NASDAQ:WAFD), Drew Industries, Inc. (NYSE:DW), and Whiting Petroleum Corp (NYSE:WLL). All of these stocks’ market caps resemble TMH’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UFS | 12 | 57499 | -6 |
| WAFD | 13 | 32873 | 1 |
| DW | 29 | 170687 | 7 |
| WLL | 35 | 635862 | -6 |
As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $224 million. That figure was $495 million in TMH’s case. Whiting Petroleum Corp (NYSE:WLL) is the most popular stock in this table. On the other hand Domtar Corp (USA) (NYSE:UFS) is the least popular one with only 12 bullish hedge fund positions. TeamHealth Holdings Inc (NYSE:TMH) 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. In this regard WLL might be a better candidate to consider taking a long position in.
Disclosure: None
