To most shareholders, hedge funds are assumed to be underperforming, old investment vehicles of yesteryear. While there are over 8000 funds trading at present, we look at the upper echelon of this group, around 450 funds. Most estimates calculate that this group has its hands on most of the hedge fund industry’s total capital, and by paying attention to their best stock picks, we have revealed a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 25 percentage points in 6.5 month (see the details here).
Equally as integral, bullish insider trading activity is another way to parse down the marketplace. Obviously, there are many motivations for an insider to drop shares of his or her company, but just one, very simple reason why they would buy. Plenty of academic studies have demonstrated the impressive potential of this strategy if shareholders understand what to do (learn more here).
Consequently, let’s take a peek at the latest action regarding Community Health Systems (NYSE:CYH).
What have hedge funds been doing with Community Health Systems (NYSE:CYH)?
Heading into 2013, a total of 19 of the hedge funds we track held long positions in this stock, a change of 27% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their stakes meaningfully.
According to our comprehensive database, Larry Robbins’s Glenview Capital had the largest position in Community Health Systems (NYSE:CYH), worth close to $263 million, comprising 3.7% of its total 13F portfolio. The second largest stake is held by Dinakar Singh of TPG-AXON Management LP, with a $101 million position; 1.1% of its 13F portfolio is allocated to the stock. Remaining hedgies that are bullish include Cliff Asness’s AQR Capital Management, Charles Clough’s Clough Capital Partners and D. E. Shaw’s D E Shaw.
With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Clough Capital Partners, managed by Charles Clough, created the most outsized position in Community Health Systems (NYSE:CYH). Clough Capital Partners had 34 million invested in the company at the end of the quarter. Michael A. Price and Amos Meron’s Empyrean Capital Partners also initiated a $11 million position during the quarter. The other funds with brand new CYH positions are Daniel Gold’s QVT Financial, Barton Biggs’s Traxis Partners, and Arthur B Cohen and Joseph Healey’s Healthcor Management LP.
Insider trading activity in Community Health Systems (NYSE:CYH)
Insider purchases made by high-level executives is particularly usable when the company in question has experienced transactions within the past 180 days. Over the last 180-day time period, Community Health Systems (NYSE:CYH) has experienced zero unique insiders buying, and 10 insider sales (see the details of insider trades here).
With the returns demonstrated by Insider Monkey’s research, retail investors must always watch hedge fund and insider trading sentiment, and Community Health Systems (NYSE:CYH) is no exception.
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