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This Metric Says You Are Smart to Buy Gentiva Health Services, Inc. (NASDAQ:GTIV) – Chemed Corporation (NYSE:CHE), LHC Group, Inc. (NASDAQ:LHCG)

Gentiva Health Services, Inc. (NASDAQ:GTIV) has experienced an increase in support from the world’s most elite money managers recently.

To the average investor, there are a multitude of gauges market participants can use to analyze stocks. Some of the best are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite fund managers can beat the market by a solid margin (see just how much).

Equally as integral, bullish insider trading activity is a second way to break down the stock market universe. There are plenty of motivations for a bullish insider to get rid of shares of his or her company, but only one, very clear reason why they would behave bullishly. Plenty of academic studies have demonstrated the market-beating potential of this tactic if shareholders know what to do (learn more here).

Now, we’re going to take a glance at the recent action encompassing Gentiva Health Services, Inc. (NASDAQ:GTIV).

Hedge fund activity in Gentiva Health Services, Inc. (NASDAQ:GTIV)

At the end of the fourth quarter, a total of 15 of the hedge funds we track were bullish in this stock, a change of 36% from the third quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably.

Of the funds we track, AQR Capital Management, managed by Cliff Asness, holds the largest position in Gentiva Health Services, Inc. (NASDAQ:GTIV). AQR Capital Management has a $8 million position in the stock, comprising 0% of its 13F portfolio. Coming in second is GAMCO Investors, managed by Mario Gabelli, which held a $6 million position; 0.2% of its 13F portfolio is allocated to the stock. Other hedge funds that are bullish include Israel Englander’s Millennium Management, Jim Simons’s Renaissance Technologies and D. E. Shaw’s D E Shaw.

As aggregate interest increased, some big names have been driving this bullishness. Prescott Group Capital Management, managed by Phil Frohlich, established the most valuable position in Gentiva Health Services, Inc. (NASDAQ:GTIV). Prescott Group Capital Management had 1 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also initiated a $0 million position during the quarter. The following funds were also among the new GTIV investors: Neil Chriss’s Hutchin Hill Capital, John Overdeck and David Siegel’s Two Sigma Advisors, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

How are insiders trading Gentiva Health Services, Inc. (NASDAQ:GTIV)?

Insider buying is particularly usable when the primary stock in question has seen transactions within the past 180 days. Over the latest 180-day time period, Gentiva Health Services, Inc. (NASDAQ:GTIV) has experienced zero unique insiders buying, and 6 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Gentiva Health Services, Inc. (NASDAQ:GTIV). These stocks are Chemed Corporation (NYSE:CHE), Addus Homecare Corporation (NASDAQ:ADUS), Almost Family, Inc. (NASDAQ:AFAM), LHC Group, Inc. (NASDAQ:LHCG), and Amedisys Inc (NASDAQ:AMED). This group of stocks are in the home health care industry and their market caps match GTIV’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Chemed Corporation (NYSE:CHE) 8 0 5
Addus Homecare Corporation (NASDAQ:ADUS) 1 0 0
Almost Family, Inc. (NASDAQ:AFAM) 8 0 1
LHC Group, Inc. (NASDAQ:LHCG) 8 1 1
Amedisys Inc (NASDAQ:AMED) 14 0 0

With the results demonstrated by Insider Monkey’s time-tested strategies, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and Gentiva Health Services, Inc. (NASDAQ:GTIV) is no exception.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.

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