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U.S. Physical Therapy, Inc. (USPH): Hedge Funds and Insiders Are Bullish, What Should You Do?

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U.S. Physical Therapy, Inc. (NYSE:USPH) was in 7 hedge funds’ portfolio at the end of the first quarter of 2013. USPH shareholders have witnessed an increase in activity from the world’s largest hedge funds lately. There were 5 hedge funds in our database with USPH positions at the end of the previous quarter.


If you’d ask most stock holders, hedge funds are perceived as underperforming, outdated investment vehicles of yesteryear. While there are greater than 8000 funds in operation at present, we at Insider Monkey choose to focus on the bigwigs of this club, about 450 funds. It is widely believed that this group oversees most of the hedge fund industry’s total asset base, and by keeping an eye on their highest performing equity investments, we have unsheathed a number of investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year 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 topped the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Equally as important, bullish insider trading activity is a second way to break down the stock market universe. Obviously, there are a number of motivations for an upper level exec to downsize shares of his or her company, but just one, very clear reason why they would buy. Several empirical studies have demonstrated the valuable potential of this strategy if investors know what to do (learn more here).

Now, let’s take a peek at the latest action regarding U.S. Physical Therapy, Inc. (NYSE:USPH).

How are hedge funds trading U.S. Physical Therapy, Inc. (NYSE:USPH)?

Heading into Q2, a total of 7 of the hedge funds we track held long positions in this stock, a change of 40% from one quarter earlier. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes meaningfully.

When looking at the hedgies we track, Chuck Royce’s Royce & Associates had the most valuable position in U.S. Physical Therapy, Inc. (NYSE:USPH), worth close to $42.1 million, accounting for 0.1% of its total 13F portfolio. The second largest stake is held by Jim Simons of Renaissance Technologies, with a $14 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedgies with similar optimism include Joel Greenblatt’s Gotham Asset Management, John Overdeck and David Siegel’s Two Sigma Advisors and D. E. Shaw’s D E Shaw.

As industrywide interest jumped, key money managers have jumped into U.S. Physical Therapy, Inc. (NYSE:USPH) headfirst. Whitebox Advisors, managed by Andy Redleaf, established the most outsized position in U.S. Physical Therapy, Inc. (NYSE:USPH). Whitebox Advisors had 0.4 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $0.2 million position during the quarter.

How have insiders been trading U.S. Physical Therapy, Inc. (NYSE:USPH)?

Insider trading activity, especially when it’s bullish, is best served when the company in question has experienced transactions within the past 180 days. Over the last 180-day time frame, U.S. Physical Therapy, Inc. (NYSE:USPH) has experienced 1 unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to U.S. Physical Therapy, Inc. (NYSE:USPH). These stocks are Acadia Healthcare Company Inc (NASDAQ:ACHC), Hanger Inc (NYSE:HGR), IPC The Hospitalist Company Inc (NASDAQ:IPCM), The Providence Service Corporation (NASDAQ:PRSC), and Healthways, Inc. (NASDAQ:HWAY). This group of stocks belong to the specialized health services industry and their market caps are closest to USPH’s market cap.

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