Editor’s note, related ticker: Health Management Associates Inc (NYSE:HMA)
There are a number of ways to keep up with stock picks from hedge funds and other major investors. Investors can get a fairly comprehensive look at their long portfolio several weeks after the end of each quarter, when hedge funds file 13Fs with the SEC, and we have found that the included information can be use to develop investing strategies (for example, the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year). The SEC also requires a shareholder to file a 13D or 13G after buying over 5% of a company’s stock (or making major changes to that position) providing us with fairly up to date information on moves that specific managers are making in specific stocks. Here are five stocks hedge funds have bought recently:
Glenview Capital, managed by Larry Robbins, has added to its position in Health Management Associates Inc (NYSE:HMA) and now owns 38 million shares of the hospital company. See more of Glenview’s stock picks. Earnings were down 39% last quarter compared to the first quarter of 2012 off of flat revenue, with adjusted earnings numbers missing analyst estimates. A rally over the last year has left Health Management Associates Inc (NYSE:HMA) fairly expensive from our point of view when recent performance is taken into account, with a trailing earnings multiple of 19; that’s a small premium to other hospital stocks.
Billionaire Steve Cohen’s SAC Capital Advisors reported ownership of 2.3 million shares of RenaissanceRe Holdings (NYSE:RNR), a property and casualty insurance company with a market capitalization of $4 billion (find Cohen’s favorite stocks). RenaissanceRe does feature some interesting valuation metrics- for example, the stock trades at 9 times forward earnings estimates- and it’s quite defensive with the stock’s beta coming in at 0.4. However, business has been down recently, and when we looked at the stock we thought that its peers might be better prospects for a value investor.
PDC Energy Inc (NYSE:PDCE) had PointState Capital disclose 1.6 million shares in a filing with the SEC. The small cap oil and gas exploration and production company, which is focused on U.S. shale plays, gets less than half of its production by energy equivalent in the form of oil but because of the spread between oil and gas prices oil is responsible for 70% of product revenue. Profits are low, and while Wall Street analysts do expect the company to recover somewhat the forward P/E looks a bit high at 25. PDC Energy Inc (NYSE:PDCE) would benefit from higher natural gas prices, but so would a number of other energy stocks.