National HealthCare Corporation (NHC): Are Hedge Funds Right About This Stock?

As one would reasonably expect, key money managers have been driving this bullishness. Gotham Asset Management, managed by Joel Greenblatt, initiated the biggest position in National HealthCare Corporation (NYSEMKT:NHC). Gotham Asset Management had $1.3 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $0.5 million position during the quarter.

Let’s also examine hedge fund activity in other stocks similar to National HealthCare Corporation (NYSEAMEX:NHC). These stocks are Monotype Imaging Holdings Inc. (NASDAQ:TYPE), Denbury Resources Inc. (NYSE:DNR), Zafgen Inc (NASDAQ:ZFGN), and PharMerica Corporation (NYSE:PMC). All of these stocks’ market caps are similar to NHC’s market cap.

As you can see these stocks had an average of 17.25 hedge funds with bullish positions and the average amount invested in these stocks was $82 million. That figure was $21 million in NHC’s case. PharMerica Corporation (NYSE:PMC) is the most popular stock in this table. On the other hand Monotype Imaging Holdings Inc. (NASDAQ:TYPE) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks National HealthCare Corporation (NYSEMKT:NHC) is even less popular than TYPE. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.