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This Metric Says You Are Smart to Buy USANA Health Sciences, Inc. (USNA)

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USANA Health Sciences, Inc. (NYSE:USNA) was in 14 hedge funds’ portfolio at the end of March. USNA investors should pay attention to an increase in support from the world’s most elite money managers in recent months. There were 12 hedge funds in our database with USNA positions at the end of the previous quarter.

To most investors, hedge funds are viewed as unimportant, old financial tools of years past. While there are more than 8000 funds in operation at present, we at Insider Monkey hone in on the top tier of this club, close to 450 funds. It is estimated that this group controls the lion’s share of all hedge funds’ total capital, and by keeping an eye on their best stock picks, we have deciphered a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually 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 topped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Just as integral, positive insider trading activity is another way to parse down the investments you’re interested in. There are plenty of reasons for a corporate insider to drop shares of his or her company, but just one, very obvious reason why they would buy. Many academic studies have demonstrated the market-beating potential of this method if shareholders know where to look (learn more here).

Now, it’s important to take a gander at the latest action encompassing USANA Health Sciences, Inc. (NYSE:USNA).

What does the smart money think about USANA Health Sciences, Inc. (NYSE:USNA)?

Heading into Q2, a total of 14 of the hedge funds we track were long in this stock, a change of 17% from one quarter earlier. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings meaningfully.

USANA Health Sciences Inc. (USNA)When looking at the hedgies we track, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in USANA Health Sciences, Inc. (NYSE:USNA). Renaissance Technologies has a $20.9 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which held a $4.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedgies with similar optimism include Cliff Asness’s AQR Capital Management, Neil Chriss’s Hutchin Hill Capital and Ken Griffin’s Citadel Investment Group.

Now, key hedge funds have jumped into USANA Health Sciences, Inc. (NYSE:USNA) headfirst. Hutchin Hill Capital, managed by Neil Chriss, established the biggest position in USANA Health Sciences, Inc. (NYSE:USNA). Hutchin Hill Capital had 2.2 million invested in the company at the end of the quarter. Daniel S. Och’s OZ Management also initiated a $1.2 million position during the quarter. The other funds with brand new USNA positions are Andrew Sandler’s Sandler Capital Management and Mike Vranos’s Ellington.

What do corporate executives and insiders think about USANA Health Sciences, Inc. (NYSE:USNA)?

Insider buying is at its handiest when the company in question has experienced transactions within the past 180 days. Over the latest half-year time period, USANA Health Sciences, Inc. (NYSE:USNA) has seen 1 unique insiders purchasing, and 8 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to USANA Health Sciences, Inc. (NYSE:USNA). These stocks are Herbalife Ltd. (NYSE:HLF), Nature’s Sunshine Prod. (NASDAQ:NATR), Lifevantage Corporation (NASDAQ:LFVN), Prestige Brands Holdings, Inc. (NYSE:PBH), and Auxilium Pharmaceuticals, Inc. (NASDAQ:AUXL). This group of stocks belong to the drug related products industry and their market caps are similar to USNA’s market cap.

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