We have been tracking recent 13D and 13G filings to see some of the stocks that various hedge funds are buying to get ready for 2013- at least, those where the fund has taken a large enough stake to report a position. Investors can’t invest in every single stock that any hedge fund in our coverage universe is buying, but this list of stock picks can still be useful to flip through quickly and see if any appealing companies come up that otherwise might not be known about. Here are five stocks hedge funds have been buying recently:
Billionaire Stephen Mandel’s Lone Pine Capital now own 5% of the outstanding shares of Tripadvisor Inc (NASDAQ:TRIP) according to a filing with the SEC. Mandel and his fellow Tiger Cubs love travel sites; three of the four largest hedge fund positions in Tripadvisor at the end of September, according to our database of 13F filings, belonged to their funds. Lone Pine had initiated its position in the stock last quarter (find more stocks Mandel was buying). However, at 32 times trailing earnings, and with net income up only 9% last quarter compared to the third quarter of 2011, we think that the stock is too expensive to be a buy.
Glenview Capital, which is managed by former Omega Advisors trader Larry Robbins, bought even more shares of hospital company Health Management Associates, Inc. (NYSE:HMA) for a total of about 34 million shares- over 13% of the company. Health Management and other hospitals trade in a very narrow range in terms of their forward P/E multiples, between 9 and 11, though in this case analysts are looking bullish as the stock carries a trailing P/E of 16. Check out Glenview’s stock picks. We think that it might be better to consider other companies in the industry.
Allscripts Healthcare Solutions Inc (NASDAQ:MDRX), which provides healthcare software and information services, had healthcare focused hedge fund Healthcor Management increase its holdings of the stock to over 9% of the shares outstanding even though the company had been Healthcor’s largest position at the end of September (find more of Healthcor’s favorite stocks). Revenue has been about flat, though special items have hurt the bottom line recently. Analyst expectations imply a forward P/E of 11, which seems to assume substantial improvement in the core business. We wouldn’t buy unless we saw much stronger signs that the company could meet expectations.