Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.
Is Envision Healthcare Holdings Inc (NYSE:EVHC) ready to rally soon? The smart money seems to be in a pessimistic mood, as the number of bullish hedge fund positions declined by nine lately. At the end of this article we will also compare EVHC to other stocks including WellCare Health Plans, Inc. (NYSE:WCG), Patterson Companies, Inc. (NASDAQ:PDCO), and Phillips 66 Partners LP (NYSE:PSXP) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
Keeping this in mind, we’re going to take a look at the latest action encompassing Envision Healthcare Holdings Inc (NYSE:EVHC).
What does the smart money think about Envision Healthcare Holdings Inc (NYSE:EVHC)?
Heading into the fourth quarter of 2016, 34 funds tracked by Insider Monkey held shares of Envision Healthcare Holdings, which represents a decline of 21% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, David Gallo’s Valinor Management LLC has the biggest position in Envision Healthcare Holdings Inc (NYSE:EVHC), worth close to $116.6 million, accounting for 4% of its total 13F portfolio. The second largest stake is held by Alpine Associates, led by Robert Emil Zoellner, holding a $102.1 million position; 3.7% of its 13F portfolio is allocated to the stock. Some other professional money managers that hold long positions consist of Andreas Halvorsen’s Viking Global, Scott Ferguson’s Sachem Head Capital and Keith Meister’s Corvex Capital.
Seeing as Envision Healthcare Holdings Inc (NYSE:EVHC) has witnessed a decline in interest from the aggregate hedge fund industry, it’s easy to see that there were a few hedgies that slashed their full holdings between July and September. Intriguingly, Alok Agrawal’s Bloom Tree Partners dropped the largest investment of the 700 funds monitored by Insider Monkey, totaling an estimated $75.7 million in stock. Bain Capital’s fund, Brookside Capital, also dumped its position, worth about $27 million.
Let’s go over hedge fund activity in other stocks similar to Envision Healthcare Holdings Inc (NYSE:EVHC). These stocks are WellCare Health Plans, Inc. (NYSE:WCG), Patterson Companies, Inc. (NASDAQ:PDCO), Phillips 66 Partners LP (NYSE:PSXP), and United Therapeutics Corporation (NASDAQ:UTHR). All of these stocks’ market caps are similar to EVHC’s market cap.
|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 22 investors with bullish positions and the average amount invested in these stocks was $535 million. That figure was $722 million in EVHC’s case. WellCare Health Plans, Inc. (NYSE:WCG) is the most popular stock in this table. On the other hand Phillips 66 Partners LP (NYSE:PSXP) is the least popular one with only eight funds holding shares. Compared to these stocks Envision Healthcare Holdings Inc (NYSE:EVHC) 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.