Now, according to many investors, hedge funds are seen as overrated, outdated investment tools of an era lost to time. Although there are over 8,000 hedge funds in operation today, this site looks at the elite of this club, close to 525 funds. It is assumed that this group has its hands on most of all hedge funds’ total capital, and by watching their highest quality picks, we’ve discovered a number of investment strategies that have historically outperformed the S&P 500. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 33 percentage points in 11 months (find a sample of our picks).
Equally as necessary, optimistic insider trading activity is a second way to analyze the financial markets. As the old adage goes: there are a number of incentives for a bullish insider to cut shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the impressive potential of this strategy if you know what to do (learn more here).
Now that that’s out of the way, we’re going to discuss the latest info surrounding Five Star Quality Care, Inc. (NYSE:FVE).
How have hedgies been trading Five Star Quality Care, Inc. (NYSE:FVE)?
At Q2’s end, a total of 12 of the hedge funds we track held long positions in this stock, a change of -20% from the previous quarter. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their holdings substantially.
Out of the hedge funds we follow, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in Five Star Quality Care, Inc. (NYSE:FVE). Renaissance Technologies has a $6.3 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is D. E. Shaw of D E Shaw, with a $2.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds with similar optimism include Brian Ashford-Russell and Tim Woolley’s Polar Capital, Peter Algert and Kevin Coldiron’s Algert Coldiron Investors and Ken Griffin’s Citadel Investment Group.
Judging by the fact that Five Star Quality Care, Inc. (NYSE:FVE) has experienced a fall in interest from the top-tier hedge fund industry, logic holds that there lies a certain “tier” of hedgies who sold off their positions entirely heading into Q2. It’s worth mentioning that Robert B. Gillam’s McKinley Capital Management sold off the biggest stake of all the hedgies we key on, valued at an estimated $3.8 million in stock, and Israel Englander of Millennium Management was right behind this move, as the fund sold off about $2.7 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 3 funds heading into Q2.
Insider trading activity in Five Star Quality Care, Inc. (NYSE:FVE)
Legal insider trading, particularly when it’s bullish, is at its handiest when the primary stock in question has seen transactions within the past half-year. Over the latest 180-day time frame, Five Star Quality Care, Inc. (NYSE:FVE) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll also take a look at the relationship between both of these indicators 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 the members of the long-term care facilities industry and their market caps match FVE’s market cap.