How do you pick the next stock to invest in? One way would be to spend hours of research browsing through thousands of publicly traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of capital and have to conduct due diligence while choosing their next pick. They don’t always get it right, but, on average, their stock picks historically generated strong returns after adjusting for known risk factors. With this in mind, let’s take a look at the recent hedge fund activity surrounding Health Net, Inc. (NYSE:HNT).
Is Health Net, Inc. (NYSE:HNT) going to take off soon? The best stock pickers are turning bullish. The number of bullish hedge fund bets moved up by 6 lately. HNT was in 43 hedge funds’ portfolios at the end of September. There were 37 hedge funds in our database with HNT holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Jacobs Engineering Group Inc (NYSE:JEC), Aluminum Corp. of China Limited (ADR) (NYSE:ACH), and CubeSmart (NYSE:CUBE) to gather more data points.
In today’s marketplace there are numerous gauges shareholders use to evaluate publicly traded companies. A couple of the most underrated gauges are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the best picks of the top investment managers can trounce the market by a healthy amount (see the details here).
With all of this in mind, let’s view the latest action encompassing Health Net, Inc. (NYSE:HNT).
How have hedgies been trading Health Net, Inc. (NYSE:HNT)?
At the end of the third quarter, a total of 43 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 16% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Samuel Isaly’s OrbiMed Advisors has the biggest position in Health Net, Inc. (NYSE:HNT), worth close to $204.6 million, accounting for 2.1% of its total 13F portfolio. The second largest stake is held by Nick Niell of Arrowgrass Capital Partners, with a $122.9 million position; the fund has 2.3% of its 13F portfolio invested in the stock. Remaining members of the smart money that are bullish consist of D. E. Shaw’s D E Shaw, John Orrico’s Water Island Capital and Robert Emil Zoellner’s Alpine Associates.