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Select Medical Holdings Corporation (NYSE:SEM): Insiders Are Dumping, Should You? – Vanguard Health Systems, Inc. (NYSE:VHS), Community Health Systems (NYSE:CYH)

Select Medical Holdings Corporation (NYSE:SEM) was in 11 hedge funds’ portfolio at the end of the fourth quarter of 2012. SEM has experienced an increase in hedge fund interest in recent months. There were 10 hedge funds in our database with SEM holdings at the end of the previous quarter.

In today’s marketplace, there are many metrics shareholders can use to monitor publicly traded companies. Two of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best investment managers can outperform the market by a solid amount (see just how much).

Select Medical Holdings Corporation (NYSE:SEM)

Equally as beneficial, bullish insider trading activity is a second way to break down the marketplace. Just as you’d expect, there are many incentives for an executive to cut shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the market-beating potential of this tactic if piggybackers know where to look (learn more here).

Consequently, it’s important to take a glance at the recent action encompassing Select Medical Holdings Corporation (NYSE:SEM).

How are hedge funds trading Select Medical Holdings Corporation (NYSE:SEM)?

At the end of the fourth quarter, a total of 11 of the hedge funds we track were bullish in this stock, a change of 10% from the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings meaningfully.

According to our comprehensive database, Chuck Royce’s Royce & Associates had the most valuable position in Select Medical Holdings Corporation (NYSE:SEM), worth close to $7 million, comprising 0% of its total 13F portfolio. Sitting at the No. 2 spot is Cliff Asness of AQR Capital Management, with a $6 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other hedgies that hold long positions include Joel Greenblatt’s Gotham Asset Management, Israel Englander’s Millennium Management and Jim Simons’s Renaissance Technologies.

With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Algert Coldiron Investors, managed by Peter Algert and Kevin Coldiron, created the most outsized position in Select Medical Holdings Corporation (NYSE:SEM). Algert Coldiron Investors had 0 million invested in the company at the end of the quarter. Neil Chriss’s Hutchin Hill Capital also initiated a $0 million position during the quarter. The only other fund with a brand new SEM position is Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Insider trading activity in Select Medical Holdings Corporation (NYSE:SEM)

Insider purchases made by high-level executives is particularly usable when the company in focus has experienced transactions within the past six months. Over the latest half-year time frame, Select Medical Holdings Corporation (NYSE:SEM) has experienced zero unique insiders purchasing, and 8 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Select Medical Holdings Corporation (NYSE:SEM). These stocks are Vanguard Health Systems, Inc. (NYSE:VHS), Amsurg Corp (NASDAQ:AMSG), LifePoint Hospitals, Inc. (NASDAQ:LPNT), Health Management Associates Inc (NYSE:HMA), and Community Health Systems (NYSE:CYH). All of these stocks are in the hospitals industry and their market caps are closest to SEM’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Vanguard Health Systems, Inc. (NYSE:VHS) 9 0 0
Amsurg Corp (NASDAQ:AMSG) 13 0 3
LifePoint Hospitals, Inc. (NASDAQ:LPNT) 19 0 5
Health Management Associates Inc (NYSE:HMA) 19 2 3
Community Health Systems (NYSE:CYH) 19 0 10

With the returns shown by Insider Monkey’s strategies, everyday investors should always watch hedge fund and insider trading activity, and Select Medical Holdings Corporation (NYSE:SEM) applies perfectly to this mantra.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

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