Five Star Quality Care, Inc. (FVE): Hedge Funds and Insiders Are Bullish, What Should You Do?

Is Five Star Quality Care, Inc. (NYSE:FVE) a worthy investment right now? The best stock pickers are in an optimistic mood. The number of bullish hedge fund bets rose by 4 in recent months.

To the average investor, there are many methods market participants can use to track their holdings. A couple of the best are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best fund managers can beat the market by a superb amount (see just how much).

Just as key, optimistic insider trading activity is a second way to parse down the marketplace. Obviously, there are lots of motivations for an insider to sell shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Several academic studies have demonstrated the impressive potential of this method if shareholders know where to look (learn more here).

With these “truths” under our belt, we’re going to take a glance at the recent action encompassing Five Star Quality Care, Inc. (NYSE:FVE).

What does the smart money think about Five Star Quality Care, Inc. (NYSE:FVE)?

At the end of the first quarter, a total of 15 of the hedge funds we track were bullish in this stock, a change of 36% from one quarter earlier. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were boosting their stakes meaningfully.

Of the funds we track, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in Five Star Quality Care, Inc. (NYSE:FVE). Renaissance Technologies has a $6.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Robert B. Gillam of McKinley Capital Management, with a $3.8 million position; 0.2% of its 13F portfolio is allocated to the company. Remaining hedgies that hold long positions include D. E. Shaw’s D E Shaw, Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group.

As aggregate interest increased, specific money managers have jumped into Five Star Quality Care, Inc. (NYSE:FVE) headfirst. Highbridge Capital Management, managed by Glenn Russell Dubin, created the most valuable position in Five Star Quality Care, Inc. (NYSE:FVE). Highbridge Capital Management had 1 million invested in the company at the end of the quarter. Peter Algert and Kevin Coldiron’s Algert Coldiron Investors also initiated a $0.4 million position during the quarter. The following funds were also among the new FVE investors: Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Cliff Asness’s AQR Capital Management, and Ken Gray and Steve Walsh’s Bryn Mawr Capital.

What do corporate executives and insiders think about Five Star Quality Care, Inc. (NYSE:FVE)?

Insider trading activity, especially when it’s bullish, is best served when the company in focus has experienced transactions within the past 180 days. Over the latest 180-day time period, Five Star Quality Care, Inc. (NYSE:FVE) has seen 2 unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Five Star Quality Care, Inc. (NYSE:FVE). These stocks are The Ensign Group, Inc. (NASDAQ:ENSG), National HealthCare Corporation (NYSEAMEX:NHC), Kindred Healthcare, Inc. (NYSE:KND), Skilled Healthcare Group, Inc. (NYSE:SKH), and Assisted Living Concepts, Inc. (NYSE:ALC). This group of stocks are in the long-term care facilities industry and their market caps resemble FVE’s market cap.