Hedge Funds Aren’t Crazy About HealthStream, Inc. (HSTM) Anymore

HealthStream, Inc. (NASDAQ:HSTM) investors should be aware of a decrease in hedge fund interest recently.

In the 21st century investor’s toolkit, there are dozens of indicators investors can use to monitor their holdings. A pair of the most innovative are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top hedge fund managers can outclass the S&P 500 by a healthy margin (see just how much).

HealthStream, Inc. (NASDAQ:HSTM)

Just as important, optimistic insider trading activity is another way to break down the financial markets. Just as you’d expect, there are a variety of incentives for a corporate insider to downsize shares of his or her company, but just one, very clear reason why they would buy. Several academic studies have demonstrated the impressive potential of this tactic if piggybackers understand where to look (learn more here).

Consequently, it’s important to take a look at the key action regarding HealthStream, Inc. (NASDAQ:HSTM).

What have hedge funds been doing with HealthStream, Inc. (NASDAQ:HSTM)?

At year’s end, a total of 7 of the hedge funds we track were bullish in this stock, a change of -13% from the third quarter. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were upping their stakes significantly.

According to our comprehensive database, Richard Driehaus’s Driehaus Capital had the largest position in HealthStream, Inc. (NASDAQ:HSTM), worth close to $7 million, accounting for 0.3% of its total 13F portfolio. Coming in second is Israel Englander of Millennium Management, with a $3.6 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other hedgies with similar optimism include Jim Simons’s Renaissance Technologies, Robert B. Gillam’s McKinley Capital Management and Cliff Asness’s AQR Capital Management.

Since HealthStream, Inc. (NASDAQ:HSTM) has faced a declination in interest from hedge fund managers, logic holds that there lies a certain “tier” of money managers who were dropping their positions entirely heading into 2013. It’s worth mentioning that Steven Cohen’s SAC Capital Advisors cut the largest investment of all the hedgies we monitor, worth close to $0.2 million in stock. These moves are interesting, as aggregate hedge fund interest fell by 1 funds heading into 2013.

What do corporate executives and insiders think about HealthStream, Inc. (NASDAQ:HSTM)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company in question has experienced transactions within the past half-year. Over the latest half-year time period, HealthStream, Inc. (NASDAQ:HSTM) has seen zero unique insiders purchasing, and 7 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to HealthStream, Inc. (NASDAQ:HSTM). These stocks are Bitauto Hldg Ltd (ADR) (NYSE:BITA), Web.com Group Inc (NASDAQ:WWWW), Move Inc. (NASDAQ:MOVE), SouFun Holdings Limited (ADR) (NYSE:SFUN), and Blucora Inc (NASDAQ:BCOR). This group of stocks are the members of the internet information providers industry and their market caps match HSTM’s market cap.