Is Brookdale Senior Living, Inc. (NYSE:BKD) a buy, sell, or hold? Investors who are in the know are taking an optimistic view. The number of long hedge fund bets advanced by 2 in recent months.
To most shareholders, hedge funds are viewed as underperforming, outdated financial tools of the past. While there are greater than 8000 funds in operation at the moment, we at Insider Monkey choose to focus on the aristocrats of this group, close to 450 funds. It is widely believed that this group has its hands on the majority of all hedge funds’ total asset base, and by keeping an eye on their best picks, we have come up with a few investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year 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 outperformed the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Equally as key, bullish insider trading activity is a second way to break down the financial markets. As the old adage goes: there are plenty of reasons for an executive to downsize shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various academic studies have demonstrated the valuable potential of this strategy if “monkeys” understand where to look (learn more here).
Keeping this in mind, it’s important to take a look at the key action regarding Brookdale Senior Living, Inc. (NYSE:BKD).
Hedge fund activity in Brookdale Senior Living, Inc. (NYSE:BKD)
At Q1′s end, a total of 37 of the hedge funds we track were bullish in this stock, a change of 6% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings meaningfully.
According to our comprehensive database, Michael Novogratz’s Fortress Investment Group had the most valuable position in Brookdale Senior Living, Inc. (NYSE:BKD), worth close to $490.5 million, accounting for 8.4% of its total 13F portfolio. Sitting at the No. 2 spot is Donald Chiboucis of Columbus Circle Investors, with a $58.4 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include James Dinan’s York Capital Management, John Bader’s Halcyon Asset Management and Daniel S. Och’s OZ Management.
Now, key hedge funds have been driving this bullishness. Forward Management, managed by J. Alan Reid, Jr., initiated the largest position in Brookdale Senior Living, Inc. (NYSE:BKD). Forward Management had 14.8 million invested in the company at the end of the quarter. Sanford J. Colen’s Apex Capital also made a $12.5 million investment in the stock during the quarter. The other funds with brand new BKD positions are Jeremy Green’s Redmile Group, Paul Tudor Jones’s Tudor Investment Corp, and Louis Bacon’s Moore Global Investments.
What have insiders been doing with Brookdale Senior Living, Inc. (NYSE:BKD)?
Bullish insider trading is most useful when the company in focus has experienced transactions within the past 180 days. Over the last 180-day time frame, Brookdale Senior Living, Inc. (NYSE:BKD) has seen zero unique insiders purchasing, and 11 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Brookdale Senior Living, Inc. (NYSE:BKD). These stocks are Kindred Healthcare, Inc. (NYSE:KND), National HealthCare Corporation (NYSEAMEX:NHC), The Ensign Group, Inc. (NASDAQ:ENSG), Capital Senior Living Corporation (NYSE:CSU), and Emeritus Corporation (NYSE:ESC). All of these stocks are in the long-term care facilities industry and their market caps are similar to BKD’s market cap.