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Almost Family, Inc. (AFAM): Are Hedge Funds Right About This Stock?

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To many of your fellow readers, hedge funds are viewed as useless, old financial vehicles of a forgotten age. Although there are over 8,000 hedge funds with their doors open in present day, this site looks at the elite of this club, about 525 funds. It is widely held that this group oversees the majority of all hedge funds’ total capital, and by watching their highest quality equity investments, we’ve come up with a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year 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 beaten the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).

Just as crucial, positive insider trading activity is another way to analyze the stock market universe. As the old adage goes: there are many incentives for an upper level exec to sell shares of his or her company, but just one, very simple reason why they would initiate a purchase. Several empirical studies have demonstrated the market-beating potential of this strategy if piggybackers know what to do (learn more here).

Now that that’s out of the way, it’s important to analyze the newest info about Almost Family, Inc. (NASDAQ:AFAM).

Almost Family, Inc. (NASDAQ:AFAM)

Hedge fund activity in Almost Family, Inc. (NASDAQ:AFAM)

In preparation for the third quarter, a total of 9 of the hedge funds we track held long positions in this stock, a change of -10% from the first quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings substantially.

Out of the hedge funds we follow, Dreman Value Management, managed by David Dreman, holds the biggest position in Almost Family, Inc. (NASDAQ:AFAM). Dreman Value Management has a $2.4 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is D. E. Shaw of D E Shaw, with a $1.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedgies that hold long positions include Jim Simons’s Renaissance Technologies, Chuck Royce’s Royce & Associates and Matthew Hulsizer’s PEAK6 Capital Management.

Judging by the fact that Almost Family, Inc. (NASDAQ:AFAM) has faced declining interest from the entirety of the hedge funds we track, it’s safe to say that there exists a select few money managers that elected to cut their entire stakes at the end of the second quarter. Interestingly, Paul Reeder áandá Edward Shapiro’s PAR Capital Management sold off the largest stake of the 450+ funds we track, worth close to $5.4 million in stock, and Richard C. Patton of Courage Capital was right behind this move, as the fund cut about $1.7 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 1 funds at the end of the second quarter.

What have insiders been doing with Almost Family, Inc. (NASDAQ:AFAM)?

Insider buying made by high-level executives is at its handiest when the primary stock in question has experienced transactions within the past six months. Over the latest six-month time frame, Almost Family, Inc. (NASDAQ:AFAM) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to Almost Family, Inc. (NASDAQ:AFAM). These stocks are Chemed Corporation (NYSE:CHE), LHC Group, Inc. (NASDAQ:LHCG), Amedisys Inc (NASDAQ:AMED), Gentiva Health Services, Inc. (NASDAQ:GTIV), and Addus Homecare Corporation (NASDAQ:ADUS). This group of stocks belong to the home health care industry and their market caps match AFAM’s market cap.

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