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Is Amedisys Inc (AMED) A Good Stock To Buy?

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended June 28, so let’s proceed with the discussion of the hedge fund sentiment on Amedisys Inc (NASDAQ:AMED).

Amedisys Inc (NASDAQ:AMED) was in 24 hedge funds’ portfolios at the end of June. AMED has seen a decrease in hedge fund interest lately. There were 26 hedge funds in our database with AMED holdings at the end of the previous quarter. Our calculations also showed that AMED isn’t among the 30 most popular stocks among hedge funds (view the video below).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 25.7% through September 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

AMED_oct2019

Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to take a glance at the recent hedge fund action regarding Amedisys Inc (NASDAQ:AMED).

Hedge fund activity in Amedisys Inc (NASDAQ:AMED)

At Q2’s end, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of -8% from the first quarter of 2019. On the other hand, there were a total of 15 hedge funds with a bullish position in AMED a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Paul Marshall Marshall Wace

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, D E Shaw, managed by D. E. Shaw, holds the biggest position in Amedisys Inc (NASDAQ:AMED). D E Shaw has a $54.3 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Noam Gottesman of GLG Partners, with a $41.5 million position; 0.2% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors with similar optimism comprise Paul Marshall and Ian Wace’s Marshall Wace LLP, Cliff Asness’s AQR Capital Management and John Overdeck and David Siegel’s Two Sigma Advisors.

Judging by the fact that Amedisys Inc (NASDAQ:AMED) has witnessed falling interest from the smart money, we can see that there was a specific group of funds that decided to sell off their positions entirely by the end of the second quarter. It’s worth mentioning that Louis Navellier’s Navellier & Associates dumped the biggest stake of all the hedgies watched by Insider Monkey, totaling an estimated $2.4 million in stock, and David Costen Haley’s HBK Investments was right behind this move, as the fund sold off about $2.3 million worth. These transactions are important to note, as total hedge fund interest was cut by 2 funds by the end of the second quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Amedisys Inc (NASDAQ:AMED) but similarly valued. We will take a look at Eagle Materials, Inc. (NYSE:EXP), LHC Group, Inc. (NASDAQ:LHCG), Graham Holdings Co (NYSE:GHC), and Valvoline Inc. (NYSE:VVV). This group of stocks’ market values are similar to AMED’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
EXP 36 681764 7
LHCG 26 108059 3
GHC 15 562705 0
VVV 22 229753 3
Average 24.75 395570 3.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 24.75 hedge funds with bullish positions and the average amount invested in these stocks was $396 million. That figure was $210 million in AMED’s case. Eagle Materials, Inc. (NYSE:EXP) is the most popular stock in this table. On the other hand Graham Holdings Co (NYSE:GHC) is the least popular one with only 15 bullish hedge fund positions. Amedisys Inc (NASDAQ:AMED) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on AMED as the stock returned 7.9% during the same time frame and outperformed the market by an even larger margin.

Disclosure: None. This article was originally published at Insider Monkey.

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