This Metric Says You Are Smart to Buy Molina Healthcare, Inc. (MOH)

Is Molina Healthcare, Inc. (NYSE:MOH) a worthy investment right now? Money managers are getting more optimistic. The number of bullish hedge fund bets increased by 5 lately.

In the 21st century investor’s toolkit, there are many methods investors can use to track Mr. Market. Some of the most useful are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best hedge fund managers can beat the S&P 500 by a significant margin (see just how much).

Equally as key, bullish insider trading activity is a second way to parse down the world of equities. As the old adage goes: there are plenty of stimuli for an executive to sell shares of his or her company, but just one, very simple reason why they would buy. Various academic studies have demonstrated the market-beating potential of this strategy if shareholders know what to do (learn more here).

Now, let’s take a gander at the key action regarding Molina Healthcare, Inc. (NYSE:MOH).

Hedge fund activity in Molina Healthcare, Inc. (NYSE:MOH)

At the end of the first quarter, a total of 26 of the hedge funds we track held long positions in this stock, a change of 24% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes significantly.

Of the funds we track, Renaissance Technologies, managed by Jim Simons, holds the largest position in Molina Healthcare, Inc. (NYSE:MOH). Renaissance Technologies has a $61.5 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Steven Cohen of SAC Capital Advisors, with a $36.5 million position; 0.2% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include James E. Flynn’s Deerfield Management, SAC Subsidiary’s CR Intrinsic Investors and Israel Englander’s Millennium Management.

Consequently, key money managers have been driving this bullishness. Healthcor Management LP, managed by Arthur B Cohen and Joseph Healey, initiated the biggest position in Molina Healthcare, Inc. (NYSE:MOH). Healthcor Management LP had 18.5 million invested in the company at the end of the quarter. David Keidan’s Buckingham Capital Management also initiated a $4.7 million position during the quarter. The following funds were also among the new MOH investors: Brian Taylor’s Pine River Capital Management, D. E. Shaw’s D E Shaw, and Michael Platt and William Reeves’s BlueCrest Capital Mgmt..

How have insiders been trading Molina Healthcare, Inc. (NYSE:MOH)?

Insider buying is best served when the company we’re looking at has experienced transactions within the past six months. Over the last half-year time frame, Molina Healthcare, Inc. (NYSE:MOH) has experienced 1 unique insiders buying, and 8 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Molina Healthcare, Inc. (NYSE:MOH). These stocks are Universal American Corporation (NYSE:UAM), WellCare Health Plans, Inc. (NYSE:WCG), Centene Corp (NYSE:CNC), Health Net, Inc. (NYSE:HNT), and Magellan Health Services Inc (NASDAQ:MGLN). All of these stocks are in the health care plans industry and their market caps are closest to MOH’s market cap.