Sabra Health Care REIT Inc (NASDAQ:SBRA) has experienced an increase in activity from the world’s largest hedge funds recently.
If you’d ask most stock holders, hedge funds are perceived as underperforming, outdated financial vehicles of years past. While there are greater than 8000 funds in operation at the moment, we look at the moguls of this group, about 450 funds. It is widely believed that this group controls most of all hedge funds’ total asset base, and by paying attention to their top stock picks, we have unearthed a few investment strategies that have historically beaten the broader indices. 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 beaten the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Equally as key, optimistic insider trading activity is a second way to break down the investments you’re interested in. There are plenty of stimuli for an insider to get rid of shares of his or her company, but just one, very clear reason why they would initiate a purchase. Many empirical studies have demonstrated the market-beating potential of this method if shareholders understand what to do (learn more here).
Now, we’re going to take a glance at the key action surrounding Sabra Health Care REIT Inc (NASDAQ:SBRA).
What does the smart money think about Sabra Health Care REIT Inc (NASDAQ:SBRA)?
Heading into 2013, a total of 9 of the hedge funds we track were long in this stock, a change of 13% from the third quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings substantially.
According to our comprehensive database, Forward Management, managed by J. Alan Reid, Jr., holds the biggest position in Sabra Health Care REIT Inc (NASDAQ:SBRA). Forward Management has a $18 million position in the stock, comprising 1.3% of its 13F portfolio. Sitting at the No. 2 spot is Driehaus Capital, managed by Richard Driehaus, which held a $10 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Other peers that hold long positions include Cliff Asness’s AQR Capital Management, John Overdeck and David Siegel’s Two Sigma Advisors and Jim Simons’s Renaissance Technologies.
Now, key hedge funds have been driving this bullishness. Millennium Management, managed by Israel Englander, initiated the most valuable position in Sabra Health Care REIT Inc (NASDAQ:SBRA). Millennium Management had 1 million invested in the company at the end of the quarter. Steven Cohen’s SAC Capital Advisors also made a $0 million investment in the stock during the quarter. The only other fund with a new position in the stock is Mike Vranos’s Ellington.
Insider trading activity in Sabra Health Care REIT Inc (NASDAQ:SBRA)
Bullish insider trading is best served when the company in focus has seen transactions within the past 180 days. Over the last six-month time frame, Sabra Health Care REIT Inc (NASDAQ:SBRA) has seen zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Sabra Health Care REIT Inc (NASDAQ:SBRA). These stocks are Healthcare Realty Trust Inc (NYSE:HR), Medical Properties Trust, Inc. (NYSE:MPW), National Health Investors Inc (NYSE:NHI), Universal Health Realty Income Trust (NYSE:UHT), and LTC Properties Inc (NYSE:LTC). All of these stocks are in the reit – healthcare facilities industry and their market caps resemble SBRA’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Healthcare Realty Trust Inc (NYSE:HR)||5||1||0|
|Medical Properties Trust, Inc. (NYSE:MPW)||9||0||5|
|National Health Investors Inc (NYSE:NHI)||6||0||2|
|Universal Health Realty Income Trust (NYSE:UHT)||3||0||0|
|LTC Properties Inc (NYSE:LTC)||5||0||5|
With the returns demonstrated by the aforementioned tactics, retail investors should always monitor hedge fund and insider trading activity, and Sabra Health Care REIT Inc (NASDAQ:SBRA) shareholders fit into this picture quite nicely.