Should You Buy Addus Homecare Corporation (ADUS)?

Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.

Is Addus Homecare Corporation (NASDAQ:ADUS) ready to rally soon? Investors who are in the know are taking a bullish view. The number of bullish hedge fund positions moved up by 3 lately. ADUS was in 10 hedge funds’ portfolios at the end of the third quarter of 2015. There were 7 hedge funds in our database with ADUS holdings at the end of the previous quarter. 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 Teligent Inc (NASDAQ:TLGT), Campus Crest Communities Inc (NYSE:CCG), and Stoneridge, Inc. (NYSE:SRI) to gather more data points.

Keeping this in mind, let’s view the fresh action regarding Addus Homecare Corporation (NASDAQ:ADUS).

How have hedgies been trading Addus Homecare Corporation (NASDAQ:ADUS)?

Heading into Q4, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 43% from one quarter earlier. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Cliff Asness’s AQR Capital Management has the largest position in Addus Homecare Corporation (NASDAQ:ADUS), worth close to $5.9 million, corresponding to less than 0.1% of its total 13F portfolio. The second largest stake is held by Renaissance Technologies, led by Jim Simons, holding a $4.8 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Some other professional money managers with similar optimism comprise Chuck Royce’s Royce & Associates, D E Shaw and John Overdeck and David Siegel’s Two Sigma Advisors.