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Hedge Funds Are Selling Assisted Living Concepts, Inc. (ALC)

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Is Assisted Living Concepts, Inc. (NYSE:ALC) a buy, sell, or hold? Money managers are taking a bearish view. The number of long hedge fund positions fell by 3 in recent months.

In today’s marketplace, there are plenty of gauges shareholders can use to analyze Mr. Market. A duo of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite money managers can outpace the market by a solid amount (see just how much).

Assisted Living Concepts, Inc. (NYSE:ALC)

Just as key, optimistic insider trading activity is a second way to parse down the stock market universe. There are a variety of stimuli for an upper level exec to get rid of shares of his or her company, but just one, very clear reason why they would buy. Several academic studies have demonstrated the impressive potential of this strategy if “monkeys” understand where to look (learn more here).

With these “truths” under our belt, it’s important to take a peek at the recent action regarding Assisted Living Concepts, Inc. (NYSE:ALC).

How are hedge funds trading Assisted Living Concepts, Inc. (NYSE:ALC)?

At the end of the fourth quarter, a total of 7 of the hedge funds we track were bullish in this stock, a change of -30% from the third quarter. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their holdings meaningfully.

Of the funds we track, Gregory Bylinsky and Jefferson Gramm’s Bandera Partners had the largest position in Assisted Living Concepts, Inc. (NYSE:ALC), worth close to $21.6 million, comprising 12.2% of its total 13F portfolio. Coming in second is Kingstown Capital Management, managed by Michael Blitzer, which held a $15.6 million position; 3.1% of its 13F portfolio is allocated to the stock. Other hedge funds that hold long positions include Martin Whitman’s Third Avenue Management, Cliff Asness’s AQR Capital Management and John A. Levin’s Levin Capital Strategies.

Because Assisted Living Concepts, Inc. (NYSE:ALC) has witnessed falling interest from the entirety of the hedge funds we track, we can see that there exists a select few money managers that decided to sell off their positions entirely heading into 2013. At the top of the heap, Geoffrey Raynor’s Q Investments (Specter Holdings) dropped the biggest stake of all the hedgies we key on, totaling an estimated $1 million in stock.. Ken Griffin’s fund, Citadel Investment Group, also dumped its stock, about $0.2 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 3 funds heading into 2013.

What have insiders been doing with Assisted Living Concepts, Inc. (NYSE:ALC)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company in focus has experienced transactions within the past half-year. Over the latest six-month time frame, Assisted Living Concepts, Inc. (NYSE:ALC) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

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

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