Capital Senior Living Corporation (NYSE:CSU) shareholders have witnessed an increase in hedge fund sentiment in recent months.
If you'd ask most shareholders, hedge funds are viewed as unimportant, old financial vehicles of yesteryear. While there are greater than 8000 funds trading today, we hone in on the aristocrats of this club, about 450 funds. It is widely believed that this group oversees the lion's share of all hedge funds' total asset base, and by keeping an eye on their highest performing equity investments, we have revealed a few investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy beat 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 outperformed the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Equally as beneficial, optimistic insider trading sentiment is a second way to break down the world of equities. Just as you'd expect, there are many reasons for an upper level exec to downsize shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the valuable potential of this method if you know what to do (learn more here).
Keeping this in mind, let's take a peek at the latest action encompassing Capital Senior Living Corporation (NYSE:CSU).
Heading into Q2, a total of 19 of the hedge funds we track were bullish in this stock, a change of 58% from the previous quarter. With hedge funds' sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes significantly.
When looking at the hedgies we track, Renaissance Technologies, managed by Jim Simons, holds the biggest position in Capital Senior Living Corporation (NYSE:CSU). Renaissance Technologies has a $27.3 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Joseph Edelman of Perceptive Advisors, with a $22.3 million position; 2.7% of its 13F portfolio is allocated to the company. Some other hedge funds with similar optimism include Phill Gross and Robert Atchinson's Adage Capital Management, Richard S. Meisenberg's ACK Asset Management and SAC Subsidiary's CR Intrinsic Investors.
Now, some big names were breaking ground themselves. Adage Capital Management, managed by Phill Gross and Robert Atchinson, established the most valuable position in Capital Senior Living Corporation (NYSE:CSU). Adage Capital Management had 14.7 million invested in the company at the end of the quarter. SAC Subsidiary's CR Intrinsic Investors also initiated a $7.8 million position during the quarter. The other funds with new positions in the stock are Jeremy Green's Redmile Group, Israel Englander's Catapult Capital Management, and James Dondero's Highland Capital Management.
Bullish insider trading is best served when the company we're looking at has seen transactions within the past half-year. Over the latest 180-day time frame, Capital Senior Living Corporation (NYSE:CSU) has seen zero unique insiders buying, and 9 insider sales (see the details of insider trades here).
Let's also review hedge fund and insider activity in other stocks similar to Capital Senior Living Corporation (NYSE:CSU). These stocks are Five Star Quality Care, Inc. (NYSE:FVE), Emeritus Corporation (NYSE:ESC), Kindred Healthcare, Inc. (NYSE:KND), National HealthCare Corporation (NYSEAMEX:NHC), and The Ensign Group, Inc. (NASDAQ:ENSG). All of these stocks are in the long-term care facilities industry and their market caps resemble CSU's market cap.