The successful funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at National HealthCare Corporation (NYSEAMEX:NHC) from the perspective of those successful funds.
National HealthCare Corporation (NYSEAMEX:NHC) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 7 hedge funds’ portfolios at the end of the third quarter of 2016. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Secureworks Corp (NASDAQ:SCWX), Chart Industries, Inc. (NASDAQ:GTLS), and Inter Parfums, Inc. (NASDAQ:IPAR) to gather more data points.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
Now, let’s review the recent action surrounding National HealthCare Corporation (NYSEAMEX:NHC).
What have hedge funds been doing with National HealthCare Corporation (NYSEAMEX:NHC)?
At Q3’s end, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. By comparison, 8 hedge funds held shares or bullish call options in NHC heading into this year. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Renaissance Technologies, one of the biggest hedge funds in the world, has the most valuable position in National HealthCare Corporation (NYSEAMEX:NHC), worth close to $19.8 million, corresponding to less than 0.1%% of its total 13F portfolio. Coming in second is Zebra Capital Management, led by Roger Ibbotson, holding a $1.1 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish include Matthew Hulsizer’s PEAK6 Capital Management, Cliff Asness’s AQR Capital Management and John Overdeck and David Siegel’s Two Sigma Advisors. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.