At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost Group, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of the mass media, analysts, and dumb money. This is why we follow the smart money moves in the small-cap space.
Is Amsurg Corp (NASDAQ:AMSG) a great investment today? Hedge funds are underweight Amsurg The number of long hedge fund positions stayed the same, which is a slightly negative development in our experience, though the overall share ownership increased slightly. However, funds we track still held just 4.60% of its shares. At the end of this article we will also compare AMSG to other stocks including Restoration Hardware Holdings Inc (NYSE:RH), Sally Beauty Holdings, Inc. (NYSE:SBH), and Scotts Miracle-Gro Co (NYSE:SMG) to get a better sense of its popularity.
Today there are a large number of gauges investors can use to evaluate stocks. Two of the most useful gauges are hedge fund and insider trading interest. Hedge fund experts at Insider Monkey have shown that, historically, those who follow the best picks of the top investment managers can beat the broader indices by a solid margin (see the details here).
Keeping this in mind, let’s analyze the recent action surrounding Amsurg Corp (NASDAQ:AMSG).
How are hedge funds trading Amsurg Corp (NASDAQ:AMSG)?
At Q3’s end, a total of 22 of the hedge funds tracked by Insider Monkey were long in this stock, unchanged from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes significantly.
According to publicly available hedge fund holdings data compiled by Insider Monkey, Lee Munder Capital Group, managed by Lee Munder, holds the most valuable position in Amsurg Corp (NASDAQ:AMSG). Lee Munder Capital Group has a $38.1 million position in the stock, comprising 0.8% of its 13F portfolio. The second-largest stake is held by Brian Ashford-Russell and Tim Woolley of Polar Capital, a $23.8 million position; 0.5% of its 13F portfolio is allocated to the stock. Other peers that are bullish consist of Paul Marshall and Ian Wace’s Marshall Wace LLP, David E. Shaw’s D E Shaw, and Joel Greenblatt’s Gotham Asset Management.
Due to the fact that Amsurg Corp (NASDAQ:AMSG) has faced bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there exists a select few fund managers that decided to sell off their entire stakes last quarter. Intriguingly, Mark Kingdon’s Kingdon Capital dropped the largest investment of the “upper crust” of funds monitored by Insider Monkey, valued at close to $3.4 million in stock. Jacob Gottlieb’s fund, Visium Asset Management, also cut its stock, about $2.6 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks similar to Amsurg Corp (NASDAQ:AMSG). These stocks are Restoration Hardware Holdings Inc (NYSE:RH), Sally Beauty Holdings, Inc. (NYSE:SBH), Scotts Miracle-Gro Co (NYSE:SMG), and Ultragenyx Pharmaceutical Inc (NASDAQ:RARE). All of these stocks’ market caps resemble AMSG’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 29.75 hedge funds with bullish positions and the average amount invested in these stocks was $593 million, while they held only $172 million in Amsurg shares. Restoration Hardware Holdings Inc (NYSE:RH) is the most popular stock in this table. On the other hand Ultragenyx Pharmaceutical Inc (NASDAQ:RARE) is the least popular one with only 25 bullish hedge fund positions. Compared to these stocks Amsurg Corp (NASDAQ:AMSG) is even less popular than RARE. Considering that hedge funds aren’t fond of this stock, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.