Is LifePoint Hospitals, Inc. (NASDAQ:LPNT) a splendid investment now? Money managers are becoming more confident. The number of long hedge fund bets improved by 2 lately.
According to most market participants, hedge funds are viewed as slow, old financial vehicles of the past. While there are more than 8000 funds in operation at present, we at Insider Monkey hone in on the top tier of this club, around 450 funds. It is estimated that this group has its hands on most of the smart money’s total capital, and by keeping an eye on their best stock picks, we have unsheathed a number of investment strategies that have historically outpaced 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 started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Just as beneficial, positive insider trading sentiment is another way to parse down the financial markets. Obviously, there are lots of reasons for an insider to sell shares of his or her company, but only one, very clear reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the market-beating potential of this tactic if shareholders understand where to look (learn more here).
Consequently, it’s important to take a glance at the recent action surrounding LifePoint Hospitals, Inc. (NASDAQ:LPNT).
How have hedgies been trading LifePoint Hospitals, Inc. (NASDAQ:LPNT)?
In preparation for this quarter, a total of 21 of the hedge funds we track held long positions in this stock, a change of 11% from the first quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their stakes considerably.
When looking at the hedgies we track, Larry Robbins’s Glenview Capital had the biggest position in LifePoint Hospitals, Inc. (NASDAQ:LPNT), worth close to $175.5 million, accounting for 1.8% of its total 13F portfolio. Sitting at the No. 2 spot is Dreman Value Management, managed by David Dreman, which held a $39.4 million position; the fund has 1% of its 13F portfolio invested in the stock. Remaining peers that are bullish include SAC Subsidiary’s CR Intrinsic Investors, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Charles Clough’s Clough Capital Partners.
As one would reasonably expect, specific money managers were breaking ground themselves. Balyasny Asset Management, managed by Dmitry Balyasny, assembled the biggest position in LifePoint Hospitals, Inc. (NASDAQ:LPNT). Balyasny Asset Management had 13.1 million invested in the company at the end of the quarter. James E. Flynn’s Deerfield Management also made a $2.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Ray Dalio’s Bridgewater Associates, Alec Litowitz and Ross Laser’s Magnetar Capital, and Brian Taylor’s Pine River Capital Management.
What do corporate executives and insiders think about LifePoint Hospitals, Inc. (NASDAQ:LPNT)?
Bullish insider trading is best served when the company we’re looking at has experienced transactions within the past half-year. Over the latest six-month time frame, LifePoint Hospitals, Inc. (NASDAQ:LPNT) has seen zero unique insiders buying, and 5 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to LifePoint Hospitals, Inc. (NASDAQ:LPNT). These stocks are Amsurg Corp (NASDAQ:AMSG), Vanguard Health Systems, Inc. (NYSE:VHS), Community Health Systems (NYSE:CYH), Select Medical Holdings Corporation (NYSE:SEM), and Health Management Associates Inc (NYSE:HMA). This group of stocks are the members of the hospitals industry and their market caps are closest to LPNT’s market cap.