Is Universal Health Services, Inc. (NYSE:UHS) a great investment now? Investors who are in the know are getting more bullish. The number of bullish hedge fund positions inched up by 1 lately.
To most shareholders, hedge funds are viewed as underperforming, old financial tools of the past. While there are over 8000 funds with their doors open at the moment, we at Insider Monkey look at the moguls of this club, about 450 funds. Most estimates calculate that this group has its hands on most of the hedge fund industry’s total capital, and by keeping an eye on their top stock picks, we have uncovered a few investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Just as beneficial, bullish insider trading activity is another way to parse down the world of equities. Obviously, there are a number of reasons for an upper level exec to get rid of shares of his or her company, but just one, very clear reason why they would behave bullishly. Various empirical studies have demonstrated the impressive potential of this tactic if shareholders understand what to do (learn more here).
With all of this in mind, it’s important to take a look at the latest action encompassing Universal Health Services, Inc. (NYSE:UHS).
How have hedgies been trading Universal Health Services, Inc. (NYSE:UHS)?
Heading into 2013, a total of 30 of the hedge funds we track were bullish in this stock, a change of 3% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their stakes significantly.
When looking at the hedgies we track, Viking Global, managed by Andreas Halvorsen, holds the most valuable position in Universal Health Services, Inc. (NYSE:UHS). Viking Global has a $102 million billion position in the stock, comprising 0.7% of its 13F portfolio. On Viking Global’s heels is Partner Fund Management, managed by Christopher MedlockáJames, which held a $52 million position; 1.1% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include Jean-Marie Eveillard’s First Eagle Investment Management, Jacob Gottlieb’s Visium Asset Management and Paul ReederáandáEdward Shapiro’s PAR Capital Management.
With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Highline Capital Management, managed by Jacob Doft, assembled the largest position in Universal Health Services, Inc. (NYSE:UHS). Highline Capital Management had 22 million invested in the company at the end of the quarter. Phill Gross and Robert Atchinson’s Adage Capital Management also made a $13 million investment in the stock during the quarter. The following funds were also among the new UHS investors: Brian Ashford-Russell and Tim Woolley’s Polar Capital, Barton Biggs’s Traxis Partners, and Mark Kingdon’s Kingdon Capital.
What have insiders been doing with Universal Health Services, Inc. (NYSE:UHS)?
Insider buying is most useful when the primary stock in question has seen transactions within the past half-year. Over the last six-month time period, Universal Health Services, Inc. (NYSE:UHS) has experienced zero unique insiders buying, and 7 insider sales (see the details of insider trades here).
With the returns exhibited by the aforementioned strategies, everyday investors should always watch hedge fund and insider trading sentiment, and Universal Health Services, Inc. (NYSE:UHS) shareholders fit into this picture quite nicely.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.