Should You Avoid Amedisys Inc (AMED)?

Is Amedisys Inc (NASDAQ:AMED) a superb investment today? Prominent investors are turning less bullish. The number of bullish hedge fund bets went down by 7 recently.

To most traders, hedge funds are perceived as slow, outdated investment tools of the past. While there are greater than 8000 funds trading today, we choose to focus on the elite of this club, around 450 funds. It is widely believed that this group oversees the majority of the smart money’s total capital, and by keeping an eye on their top stock picks, we have revealed a number of investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year 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 trumped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Amedisys Inc

Just as beneficial, bullish insider trading activity is another way to break down the stock market universe. Just as you’d expect, there are a variety of reasons for an executive to get rid of shares of his or her company, but just one, very obvious reason why they would behave bullishly. Several empirical studies have demonstrated the market-beating potential of this strategy if investors know where to look (learn more here).

Consequently, let’s take a glance at the recent action surrounding Amedisys Inc (NASDAQ:AMED).

What have hedge funds been doing with Amedisys Inc (NASDAQ:AMED)?

Heading into Q2, a total of 8 of the hedge funds we track held long positions in this stock, a change of -47% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their holdings considerably.

According to our comprehensive database, Phill Gross and Robert Atchinson’s Adage Capital Management had the most valuable position in Amedisys Inc (NASDAQ:AMED), worth close to $12.1 million, comprising less than 0.1%% of its total 13F portfolio. Coming in second is Camber Capital Management, managed by Stephen DuBois, which held a $7.8 million position; 0.6% of its 13F portfolio is allocated to the stock. Remaining hedgies that hold long positions include Cliff Asness’s AQR Capital Management, and Ken Gray and Steve Walsh’s Bryn Mawr Capital.

Because Amedisys Inc (NASDAQ:AMED) has witnessed bearish sentiment from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of fund managers who sold off their positions entirely heading into Q2. It’s worth mentioning that Sean Cullinan’s Point State Capital dropped the biggest stake of the 450+ funds we monitor, worth an estimated $2.3 million in stock., and Jim Simons of Renaissance Technologies was right behind this move, as the fund said goodbye to about $1.8 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 7 funds heading into Q2.

How have insiders been trading Amedisys Inc (NASDAQ:AMED)?

Insider trading activity, especially when it’s bullish, is best served when the company we’re looking at has seen transactions within the past half-year. Over the latest six-month time frame, Amedisys Inc (NASDAQ:AMED) has experienced zero unique insiders buying, and 1 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Amedisys Inc (NASDAQ:AMED). These stocks are Chemed Corporation (NYSE:CHE), Addus Homecare Corporation (NASDAQ:ADUS), Almost Family, Inc. (NASDAQ:AFAM), LHC Group, Inc. (NASDAQ:LHCG), and Gentiva Health Services, Inc. (NASDAQ:GTIV). This group of stocks are in the home health care industry and their market caps are similar to AMED’s market cap.