As we already know from media reports and hedge fund investor letters, many hedge funds lost money in the third quarter, blaming macroeconomic conditions and unpredictable events that hit several sectors, with healthcare among them. Nevertheless, most investors decided to stick to their bullish theses and their long-term focus allows us to profit from the recent declines. In particular, let’s take a look at what hedge funds think about MedAssets, Inc. (NASDAQ:MDAS) in this article.
MedAssets, Inc. (NASDAQ:MDAS) was in 17 hedge funds’ portfolios at the end of September. MDAS shareholders have witnessed an increase in hedge fund sentiment recently. There were 16 hedge funds in our database with MDAS 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 Tumi Holdings Inc (NYSE:TUMI), Penumbra Inc (NYSE:PEN), and Sonic Corporation (NASDAQ:SONC) to gather more data points.
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If you’d ask most shareholders, hedge funds are perceived as slow, old financial tools of yesteryear. While there are over 8,000 funds trading today, We hone in on the elite of this club, around 700 funds. These investment experts shepherd most of all hedge funds’ total asset base, and by shadowing their highest performing picks, Insider Monkey has brought to light a number of investment strategies that have historically surpassed Mr. Market. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
With all of this in mind, we’re going to view the new action regarding MedAssets, Inc. (NASDAQ:MDAS).
How have hedgies been trading MedAssets, Inc. (NASDAQ:MDAS)?
At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from the previous quarter. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Starboard Value LP, managed by Jeffrey Smith, holds the largest position in MedAssets, Inc. (NASDAQ:MDAS). Starboard Value LP has a $106.8 million position in the stock, comprising 2.4% of its 13F portfolio. On Starboard Value LP’s heels is Jamie Zimmerman of Litespeed Management, with a $65.7 million position; 8.1% of its 13F portfolio is allocated to the company. Other peers that are bullish contain Claus Moller’s P2 Capital Partners, Michael Lowenstein’s Kensico Capital and Michael Doheny’s Freshford Capital Management.
As aggregate interest increased, some big names have been driving this bullishness. Starboard Value LP, managed by Jeffrey Smith, created the most outsized position in MedAssets, Inc. (NASDAQ:MDAS). Starboard Value LP had $106.8 million invested in the company at the end of the quarter. Kenneth Squire’s 13D Management also made a $10.9 million investment in the stock during the quarter. The other funds with brand new MDAS positions are Joel Greenblatt’s Gotham Asset Management, Michael Doheny’s Freshford Capital Management, and Matthew Tewksbury’s Stevens Capital Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as MedAssets, Inc. (NASDAQ:MDAS) but similarly valued. We will take a look at Tumi Holdings Inc (NYSE:TUMI), Penumbra Inc (NYSE:PEN), Sonic Corporation (NASDAQ:SONC), and Apollo Group Inc (NASDAQ:APOL). All of these stocks’ market caps are closest to MDAS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TUMI | 16 | 105739 | 2 |
| PEN | 13 | 91595 | 13 |
| SONC | 30 | 204992 | 6 |
| APOL | 25 | 324765 | -2 |
As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $182 million. That figure was $315 million in MDAS’s case. Sonic Corporation (NASDAQ:SONC) is the most popular stock in this table. On the other hand Penumbra Inc (NYSE:PEN) is the least popular one with only 13 bullish hedge fund positions. MedAssets, Inc. (NASDAQ:MDAS) 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 SONC might be a better candidate to consider a long position.
