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Is The Ensign Group, Inc. (ENSG) Going to Burn These Hedge Funds?

Due to the fact that The Ensign Group, Inc. (NASDAQ:ENSG) has faced a falling interest from hedge fund managers, it’s safe to say that there lies a certain “tier” of hedge funds who sold off their full holdings in the third quarter. Intriguingly, Matthew Hulsizer’s PEAK6 Capital Management cut the biggest position of all the hedgies monitored by Insider Monkey, worth close to $1.6 million in stock. Mike Vranos’ fund, Ellington, also cut its stock, about $0.8 million worth of shares. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 5 funds in the third quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as The Ensign Group, Inc. (NASDAQ:ENSG) but similarly valued. We will take a look at Precision Drilling Corp (USA) (NYSE:PDS), Nuveen Credit Strategies Income Fund (NYSE:JQC), Group Inc (NASDAQ:WEB), and Wright Medical Group Inc (NASDAQ:WMGI). This group of stocks’ market values resemble ENSG’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PDS 8 39831 0
JQC 5 15116 1
WEB 25 248767 4
WMGI 23 460110 -5

As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $191 million. That figure was $43 million in The Ensign Group, Inc. (NASDAQ:ENSG)’s case. Group Inc (NASDAQ:WEB) is the most popular stock in this table. On the other hand, Nuveen Credit Strategies Income Fund (NYSE:JQC) is the least popular one with only 5 bullish hedge fund positions. The Ensign Group, Inc. (NASDAQ:ENSG) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Group Inc (NASDAQ:WEB) might be a better candidate to consider a long position.

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