Is The Ensign Group, Inc. (NASDAQ:ENSG) worth your attention right now? Hedge funds are buying. The number of long hedge fund positions improved by 4 in recent months.
To most shareholders, hedge funds are seen as worthless, outdated investment tools of years past. While there are greater than 8000 funds with their doors open at present, we hone in on the masters of this group, about 450 funds. It is widely believed that this group oversees the majority of all hedge funds’ total capital, and by monitoring their top equity investments, we have revealed a number of investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outperformed 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Just as important, bullish insider trading activity is another way to break down the marketplace. Just as you’d expect, there are lots of reasons for an upper level exec to sell shares of his or her company, but only one, very simple reason why they would behave bullishly. Several empirical studies have demonstrated the valuable potential of this tactic if investors understand where to look (learn more here).
With these “truths” under our belt, let’s take a look at the key action regarding The Ensign Group, Inc. (NASDAQ:ENSG).
Hedge fund activity in The Ensign Group, Inc. (NASDAQ:ENSG)
At the end of the first quarter, a total of 9 of the hedge funds we track held long positions in this stock, a change of 80% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were increasing their stakes considerably.
When looking at the hedgies we track, Cliff Asness’s AQR Capital Management had the largest position in The Ensign Group, Inc. (NASDAQ:ENSG), worth close to $2.9 million, accounting for less than 0.1%% of its total 13F portfolio. On AQR Capital Management’s heels is Andy Redleaf of Whitebox Advisors, with a $0.9 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining hedgies with similar optimism include John Overdeck and David Siegel’s Two Sigma Advisors, Chuck Royce’s Royce & Associates and Paul Tudor Jones’s Tudor Investment Corp.
With a general bullishness amongst the heavyweights, specific money managers have jumped into The Ensign Group, Inc. (NASDAQ:ENSG) headfirst. Two Sigma Advisors, managed by John Overdeck and David Siegel, established the biggest position in The Ensign Group, Inc. (NASDAQ:ENSG). Two Sigma Advisors had 0.8 million invested in the company at the end of the quarter. Ken Gray and Steve Walsh’s Bryn Mawr Capital also made a $0.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Jim Simons’s Renaissance Technologies and Mike Vranos’s Ellington.
What do corporate executives and insiders think about The Ensign Group, Inc. (NASDAQ:ENSG)?
Insider trading activity, especially when it’s bullish, is most useful when the company we’re looking at has seen transactions within the past half-year. Over the last six-month time period, The Ensign Group, Inc. (NASDAQ:ENSG) has experienced zero unique insiders buying, and 4 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to The Ensign Group, Inc. (NASDAQ:ENSG). These stocks are Five Star Quality Care, Inc. (NYSE:FVE), Emeritus Corporation (NYSE:ESC), Kindred Healthcare, Inc. (NYSE:KND), National HealthCare Corporation (NYSEAMEX:NHC), and Capital Senior Living Corporation (NYSE:CSU). This group of stocks are in the long-term care facilities industry and their market caps are closest to ENSG’s market cap.