To many of your fellow readers, hedge funds are assumed to be bloated, outdated financial vehicles of a forgotten age. Although there are In excess of 8,000 hedge funds trading in present day, this site looks at the crème de la crème of this group, around 525 funds. It is widely held that this group oversees most of all hedge funds' total capital, and by paying attention to their best equity investments, we've spotted a number of investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we've began to sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Just as crucial, bullish insider trading activity is a second way to analyze the marketplace. Just as you'd expect, there are plenty of incentives for a corporate insider to sell shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various empirical studies have demonstrated the valuable potential of this strategy if shareholders understand where to look (learn more here).
Keeping this in mind, it's important to discuss the newest info about WebMD Health Corp. (NASDAQ:WBMD).
Heading into Q3, a total of 19 of the hedge funds we track were bullish in this stock, a change of 27% from the first quarter. With hedge funds' capital changing hands, there exists an "upper tier" of notable hedge fund managers who were upping their holdings considerably.
Out of the hedge funds we follow, Carl Icahn's Icahn Capital LP had the largest position in WebMD Health Corp. (NASDAQ:WBMD), worth close to $196.8 million, comprising 0.9% of its total 13F portfolio. On Icahn Capital LP's heels is Kensico Capital, managed by Michael Lowenstein, which held a $167.1 million position; the fund has 4.3% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include Donald Chiboucis's Columbus Circle Investors, Sean Cullinan's Point State Capital and SAC Subsidiary's CR Intrinsic Investors.
As one would understandably expect, specific money managers were breaking ground themselves. Soros Fund Management, managed by George Soros, initiated the most valuable position in WebMD Health Corp. (NASDAQ:WBMD). Soros Fund Management had 273.9 million invested in the company at the end of the quarter. Carl Icahn's Icahn Capital LP also initiated a $196.8 million position during the quarter. The following funds were also among the new WBMD investors: Michael Lowenstein's Kensico Capital, George Soros's Soros Fund Management, and Donald Chiboucis's Columbus Circle Investors.
Insider buying made by high-level executives is at its handiest when the company we're looking at has seen transactions within the past half-year. Over the last 180-day time frame, WebMD Health Corp. (NASDAQ:WBMD) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll also take a look at the relationship between both of these indicators in other stocks similar to WebMD Health Corp. (NASDAQ:WBMD). These stocks are Computer Programs & Systems, Inc. (NASDAQ:CPSI), Allscripts Healthcare Solutions Inc (NASDAQ:MDRX), Medidata Solutions Inc (NASDAQ:MDSO), Quality Systems, Inc. (NASDAQ:QSII), and MedAssets, Inc. (NASDAQ:MDAS). This group of stocks are in the healthcare information services industry and their market caps are similar to WBMD's market cap.