It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The S&P 500 Index gained 7.6% in the 12 month-period that ended November 21, while less than 49% of its stocks beat the benchmark. In contrast, the 30 most popular mid-cap stocks among the top hedge fund investors tracked by the Insider Monkey team returned 18% over the same period, which provides evidence that these money managers do have great stock picking abilities. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Cross Country Healthcare, Inc. (NASDAQ:CCRN) .
Cross Country Healthcare, Inc. (NASDAQ:CCRN) investors should be aware of an increase in hedge fund interest of late. There were 13 hedge funds in our database with CCRN positions at the end of September. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Cowen Group, Inc. (NASDAQ:COWN), Guaranty Bancorp (NASDAQ:GBNK), and Ascendis Pharma A/S (NASDAQ:ASND) to gather more data points.
When we look at the insider transactions, which are especially informative because insiders know their companies more than anyone else, we noticed a cluster of insider purchases in August when the shares were trading at $12. Those proved to be timely purchases as CCRN shares improved more than 25% over the last 4 months. We haven’t seen any purchases since then.
Keeping this in mind, we’re going to take a look at the new action surrounding Cross Country Healthcare, Inc. (NASDAQ:CCRN).
What does the smart money think about Cross Country Healthcare, Inc. (NASDAQ:CCRN)?
Heading into the fourth quarter of 2016, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 30% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CCRN over the last 5 quarters. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Simcoe Capital Management, led by Jeffrey Jacobowitz, holds the number one position in Cross Country Healthcare, Inc. (NASDAQ:CCRN). Simcoe Capital Management has a $4.2 million position in the stock, comprising 2.2% of its 13F portfolio. The second most bullish fund manager is Paul Hondros of AlphaOne Capital Partners, with a $3.7 million position; the fund has 1.2% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish encompass Chuck Royce’s Royce & Associates, Millennium Management, one of the 10 largest hedge funds in the world, and Cliff Asness’s AQR Capital Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Now, key hedge funds were breaking ground themselves. Simcoe Capital Management, led by Jeffrey Jacobowitz, initiated the most outsized position in Cross Country Healthcare, Inc. (NASDAQ:CCRN). Simcoe Capital Management had $4.2 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.3 million position during the quarter. The other funds with brand new CCRN positions are Mike Vranos’s Ellington and Matthew Tewksbury’s Stevens Capital Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Cross Country Healthcare, Inc. (NASDAQ:CCRN) but similarly valued. We will take a look at Cowen Group, Inc. (NASDAQ:COWN), Guaranty Bancorp (NASDAQ:GBNK), Ascendis Pharma A/S (NASDAQ:ASND), and Overstock.com, Inc. (NASDAQ:OSTK). This group of stocks’ market valuations are closest to CCRN’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $107 million. That figure was $17 million in CCRN’s case. Ascendis Pharma A/S (NASDAQ:ASND) is the most popular stock in this table. On the other hand Cowen Group, Inc. (NASDAQ:COWN) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Cross Country Healthcare, Inc. (NASDAQ:CCRN) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.