Vanguard Health Systems, Inc. (NYSE:VHS) investors should pay attention to a decrease in hedge fund sentiment lately.
To the average investor, there are a multitude of gauges investors can use to monitor stocks. Some of the most useful are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite hedge fund managers can trounce the S&P 500 by a solid margin (see just how much).
Just as key, bullish insider trading activity is another way to parse down the financial markets. Just as you’d expect, there are lots of incentives for a bullish insider to cut shares of his or her company, but only one, very simple reason why they would buy. Many academic studies have demonstrated the impressive potential of this tactic if you understand where to look (learn more here).
With all of this in mind, let’s take a gander at the latest action surrounding Vanguard Health Systems, Inc. (NYSE:VHS).
How are hedge funds trading Vanguard Health Systems, Inc. (NYSE:VHS)?
In preparation for this year, a total of 9 of the hedge funds we track were long in this stock, a change of -18% from one quarter earlier. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their stakes significantly.
When looking at the hedgies we track, Kingdon Capital, managed by Mark Kingdon, holds the biggest position in Vanguard Health Systems, Inc. (NYSE:VHS). Kingdon Capital has a $5 million position in the stock, comprising 0.3% of its 13F portfolio. Coming in second is SAC Subsidiary of CR Intrinsic Investors, with a $3 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include SAC Subsidiary’s Sigma Capital Management, James E. Flynn’s Deerfield Management and D. E. Shaw’s D E Shaw.
Seeing as Vanguard Health Systems, Inc. (NYSE:VHS) has faced falling interest from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of hedge funds that elected to cut their positions entirely at the end of the year. At the top of the heap, Jim Simons’s Renaissance Technologies dumped the biggest position of the 450+ funds we monitor, valued at an estimated $1 million in stock., and Phill Gross and Robert Atchinson of Adage Capital Management was right behind this move, as the fund cut about $1 million worth. These moves are important to note, as total hedge fund interest was cut by 2 funds at the end of the year.
What have insiders been doing with Vanguard Health Systems, Inc. (NYSE:VHS)?
Insider trading activity, especially when it’s bullish, is most useful when the company we’re looking at has seen transactions within the past half-year. Over the last six-month time period, Vanguard Health Systems, Inc. (NYSE:VHS) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Vanguard Health Systems, Inc. (NYSE:VHS). These stocks are Community Health Systems (NYSE:CYH), Health Management Associates Inc (NYSE:HMA), LifePoint Hospitals, Inc. (NASDAQ:LPNT), Select Medical Holdings Corporation (NYSE:SEM), and Amsurg Corp (NASDAQ:AMSG). All of these stocks are in the hospitals industry and their market caps resemble VHS’s market cap.