We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the government. The 13F filings show the funds’ and investors’ portfolio positions as of September 30. In this article we look at what those investors think of The Ensign Group, Inc. (NASDAQ:ENSG).
Is The Ensign Group, Inc. (NASDAQ:ENSG) a bargain? The best stock pickers are taking a pessimistic view. The number of long hedge fund bets retreated by 5 lately. Considering the stock market performance of the Ensign Group, Inc. (NASDAQ:ENSG), the hedge funds might be right in having a pessimistic view, as the shares of the company were down 16.51% during the quarter.
In order to find out more about the hedge fund sentiment, we will cover hedge funds that held positions in the Ensign Group, Inc. (NASDAQ:ENSG), at the end of September. Further, we will also compare the Ensign Group, Inc. (NASDAQ:ENSG) to other stocks, including Precision Drilling Corp (USA) (NYSE:PDS), Nuveen Credit Strategies Income Fund (NYSE:JQC), and Web.com Group Inc (NASDAQ:WEB) to get a better sense of its popularity.
According to most stock holders, hedge funds are viewed as worthless, old financial tools of yesteryear. While there are more than 8000 funds trading at the moment, our researchers look at the upper echelon of this club, approximately 700 funds. It is estimated that this group of investors oversees the lion’s share of the smart money’s total capital, and by tracking their top picks, Insider Monkey has revealed various investment strategies that have historically exceeded the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points per year for a decade in their back tests.
With all of this in mind, we’re going to view the fresh action encompassing The Ensign Group, Inc. (NASDAQ:ENSG).
Hedge fund activity in The Ensign Group, Inc. (NASDAQ:ENSG)
Heading into Q4, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a decline of 36% from one quarter earlier. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, PAR Capital Management, managed by Paul Reeder and Edward Shapiro, holds the largest position in The Ensign Group, Inc. (NASDAQ:ENSG). PAR Capital Management has a $10.7 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, holding a $10.6 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Other peers with similar optimism encompass Samuel Isaly’s OrbiMed Advisors, Michael Reeber’s Andalusian Capital Partners, and Cliff Asness’ AQR Capital Management.
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), Web.com 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|
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. Web.com 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, Web.com Group Inc (NASDAQ:WEB) might be a better candidate to consider a long position.