Hedge Funds Are Doubling Down On These Five Stocks

At the end of the first quarter, roughly 22% of TeamHealth Holdings Inc (NYSE:TMH) common stock was held by 22 top hedge funds, down from 25 a quarter before. The value of their holdings, however, surged by nearly 150% to $660 million. A quick look at the hedge fund activity with regard to this stock shows a large number of new positions established during the quarter, which comprised a substantial amount of shares. Barry Rosenstein‘s JANA Partners acquired 5.89 million shares of TeamHealth Holdings Inc (NYSE:TMH) worth $246 million, while Scott Ferguson’s Sachem Head Capital also initiated a fresh stake that amounted to 3.2 million shares by the end of March. JANA’s position is activist by nature and the funds has obtained three board seats as it looks to correct the company’s “missteps in critical areas including capital allocation, strategy and governance.” A provider of staffing and administrative services to hospitals and other healthcare institutions, TeamHealth has a market cap of $3.55 billion and does not pay a dividend. The stock is currently trading at a trailing Price to Earnings (P/E) ratio of around 64, more than double the industry average of 30 as reported by Yahoo! Finance. TeamHealth Holdings Inc (NYSE:TMH) entered a steady uptrend in the beginning of the second quarter, helped by the latest quarterly report that surpassed expectations. The company posted adjusted earnings of $0.62 per share on the back of $1.14 billion in revenues, while analysts had projected $1.12 billion in revenue and a profit of $0.58 per share.

Marriott International Inc (NASDAQ:MAR) also attracted a considerable amount of fresh investment from elite hedge funds, although the number of funds invested barely moved. At the end of the first quarter, 33 of the funds followed by Insider Monkey held $1.28 billion worth of Marriott International Inc (NASDAQ:MAR) shares, up from $606 million a quarter before. During the first quarter, Jonathon Jacobson‘s Highfields Capital Management bought approximately 6.86 million shares valued at $488 million. Boykin Curry also thought it was a good time to invest in Marriott International and bought 3.54 million shares for his fund, Eagle Capital Management. Marriott International Inc (NASDAQ:MAR)’s proposed takeover of Starwood Hotels & Resorts Worldwide Inc(NYSE:HOT) hit a stumbling block in May, after two competitors filed a lawsuit, claiming the deal would violate exclusivity agreements. Marriott won a bidding war to acquire Starwood in a deal worth $12.9 billion, which would create the world’s largest hotel operator by rooms.

Number one stock in this group is ITC Holdings Corp. (NYSE:ITC), an operator of energy transmission infrastructure. The value of hedge funds’ positions in the company increased to $1.55 billion at the end of March, from $668 million registered three months earlier. The number of long positions also rose to 35 from 26 at the end of December. The largest stake in ITC Holdings Corp. (NYSE:ITC) among the funds tracked by Insider Monkey was held by Eton Park Capital, run by Eric Mindich. According to its latest 13F filing, the fund held 5.79 million shares worth $252 million at the end of the quarter. ITC Holdings Corp. (NYSE:ITC) is subject to a takeover bid by Canadian utility operator Fortis. Investors would receive $22.57 in cash and 0.752 Fortis shares for each ITC shares they holds, valuing the company at $11.3 billion. Fortis also agreed to assume $4.4 billion in ITC debt. The company has scheduled a special shareholder meeting on June 22 at which shareholders will vote on the bid.

Disclosure: none.