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eHealth, Inc. (EHTH): Deerfield Management Picked a Bad Time to Buy 1 Million Shares of This Company

eHealth, Inc. (NASDAQ:EHTH) appears to have a major proponent in James E Flynn’s Deerfield Management, as the health-focused hedge fund continues to stockpile the company’s common shares. In a filing released by the U.S Securities and Exchange Commission on Tuesday, it was reported that the fund has added exactly 1 million shares to their growing collection, which now totals 3.26 million, giving them an 18.37% passive stake in the company.

EHTH EHealth Inc logoDeerfield Management, a non-activist, health-focused hedge fund, focuses on guiding its holding companies through the challenges inherent in managing their R&D and financing, avoiding hostile takeovers, and transitioning to commercial enterprises. While Deerfield has held and sold off small stakes in eHealth, Inc. (NASDAQ:EHTH) over the past few years, it wasn’t until early 2014 when eHealth’s stock briefly peaked above $60 that the fund started to really take notice.

At the end of the first quarter, Deerfield had re-opened a position on eHealth, Inc. (NASDAQ:EHTH) with 271,000 shares. They increased their holding by 389% over the next quarter, upping their stake to 1.32 million shares, and then raised it another 72% in the third quarter to the 2.26 million shares they held before this latest purchase.

Despite their eHealth, Inc. (NASDAQ:EHTH) buying spree, the holding is not their largest. As of September 30 that honor went to Auxilium Pharmaceuticals, Inc. (NASDAQ:AUXL), with Deerfield owning 6.27 million shares worth $187 million. Deerfield also had large investments in Allergan, Inc. (NYSE:AGN) (491,399 shares worth $87.6 million) and NxStage Medical, Inc. (NASDAQ:NXTM) (6.14 million shares worth $80.6 million).