Healthcare Services Group, Inc. (NASDAQ:HCSG) investors should be aware of a decrease in support from the world’s most elite money managers of late.
To most stock holders, hedge funds are assumed to be underperforming, old financial tools of yesteryear. While there are greater than 8000 funds with their doors open at present, we at Insider Monkey hone in on the bigwigs of this club, about 450 funds. Most estimates calculate that this group has its hands on the lion’s share of all hedge funds’ total capital, and by tracking their best investments, we have revealed a few investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 outperformed the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).
Equally as key, positive insider trading sentiment is another way to break down the world of equities. As the old adage goes: there are lots of incentives for a bullish insider to downsize shares of his or her company, but just one, very simple reason why they would buy. Several academic studies have demonstrated the impressive potential of this strategy if you know where to look (learn more here).
Now, we’re going to take a gander at the recent action surrounding Healthcare Services Group, Inc. (NASDAQ:HCSG).
How have hedgies been trading Healthcare Services Group, Inc. (NASDAQ:HCSG)?
Heading into 2013, a total of 7 of the hedge funds we track held long positions in this stock, a change of -30% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were increasing their stakes meaningfully.
According to our comprehensive database, Chuck Royce’s Royce & Associates had the biggest position in Healthcare Services Group, Inc. (NASDAQ:HCSG), worth close to $19 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by Driehaus Capital, managed by Richard Driehaus, which held a $7.3 million position; 0.3% of its 13F portfolio is allocated to the stock. Other hedgies that hold long positions include Israel Englander’s Millennium Management, Ken Griffin’s Citadel Investment Group and Brian Ashford-Russell and Tim Woolley’s Polar Capital.
Judging by the fact that Healthcare Services Group, Inc. (NASDAQ:HCSG) has witnessed bearish sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of funds that slashed their entire stakes last quarter. It’s worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dropped the largest investment of all the hedgies we watch, worth an estimated $1 million in stock.. Jim Simons’s fund, Renaissance Technologies, also sold off its stock, about $0.6 million worth. These moves are interesting, as total hedge fund interest dropped by 3 funds last quarter.
Insider trading activity in Healthcare Services Group, Inc. (NASDAQ:HCSG)
Insider purchases made by high-level executives is at its handiest when the primary stock in question has seen transactions within the past six months. Over the latest six-month time period, Healthcare Services Group, Inc. (NASDAQ:HCSG) has seen zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Healthcare Services Group, Inc. (NASDAQ:HCSG). These stocks are Shutterstock Inc (NYSE:SSTK), Giant Interactive Group Inc (ADR) (NYSE:GA), Fair Isaac Corporation (NYSE:FICO), Zillow Inc (NASDAQ:Z), and The Advisory Board Company (NASDAQ:ABCO). This group of stocks belong to the business services industry and their market caps resemble HCSG’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Shutterstock Inc (NYSE:SSTK) | 2 | 1 | 0 |
| Giant Interactive Group Inc (ADR) (NYSE:GA) | 13 | 0 | 0 |
| Fair Isaac Corporation (NYSE:FICO) | 11 | 0 | 7 |
| Zillow Inc (NASDAQ:Z) | 10 | 0 | 9 |
| The Advisory Board Company (NASDAQ:ABCO) | 9 | 0 | 9 |
With the returns demonstrated by the aforementioned tactics, everyday investors must always watch hedge fund and insider trading activity, and Healthcare Services Group, Inc. (NASDAQ:HCSG) applies perfectly to this mantra.
