National Health Investors Inc (NHI): Are Hedge Funds Right About This Stock?

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National Health Investors Inc (NYSE:NHI) shareholders have witnessed a decrease in support from the world’s most elite money managers of late.

In the eyes of most traders, hedge funds are viewed as slow, outdated financial tools of the past. While there are over 8000 funds with their doors open at the moment, we at Insider Monkey hone in on the bigwigs of this club, close to 450 funds. It is widely believed that this group controls most of the smart money’s total asset base, and by watching their top picks, we have deciphered a number of investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Chuck Royce

Just as beneficial, optimistic insider trading activity is a second way to break down the world of equities. There are lots of motivations for an insider to drop shares of his or her company, but just one, very simple reason why they would behave bullishly. Many empirical studies have demonstrated the market-beating potential of this method if “monkeys” know where to look (learn more here).

With these “truths” under our belt, let’s take a glance at the recent action regarding National Health Investors Inc (NYSE:NHI).

Hedge fund activity in National Health Investors Inc (NYSE:NHI)

In preparation for this quarter, a total of 6 of the hedge funds we track were long in this stock, a change of 0% from the previous quarter. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were boosting their holdings meaningfully.

According to our comprehensive database, Chuck Royce’s Royce & Associates had the largest position in National Health Investors Inc (NYSE:NHI), worth close to $11.7 million, comprising less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Jim Simons of Renaissance Technologies, with a $10.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include Israel Englander’s Millennium Management, Cliff Asness’s AQR Capital Management and Brian Ashford-Russell and Tim Woolley’s Polar Capital.

Judging by the fact that National Health Investors Inc (NYSE:NHI) has witnessed falling interest from hedge fund managers, we can see that there lies a certain “tier” of hedgies who were dropping their full holdings last quarter. It’s worth mentioning that Ken Griffin’s Citadel Investment Group said goodbye to the biggest stake of the “upper crust” of funds we track, worth close to $0.9 million in stock. These moves are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

What do corporate executives and insiders think about National Health Investors Inc (NYSE:NHI)?

Insider trading activity, especially when it’s bullish, is most useful when the primary stock in question has seen transactions within the past six months. Over the latest half-year time frame, National Health Investors Inc (NYSE:NHI) has seen zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to National Health Investors Inc (NYSE:NHI). These stocks are Sabra Health Care REIT Inc (NASDAQ:SBRA), LTC Properties Inc (NYSE:LTC), Healthcare Trust Of America Inc (NYSE:HTA), Healthcare Realty Trust Inc (NYSE:HR), and Medical Properties Trust, Inc. (NYSE:MPW). This group of stocks belong to the reit – healthcare facilities industry and their market caps match NHI’s market cap.

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