Should You Buy Molina Healthcare, Inc. (MOH)?

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As one would reasonably expect, key hedge funds were breaking ground themselves. Farallon Capital, managed by Thomas Steyer, initiated the most outsized position in Molina Healthcare, Inc. (NYSE:MOH). The fund had $5 million invested in the company at the end of the quarter. Krishen Sud’s Sivik Global Healthcare also initiated a $4.7 million position during the quarter. The other funds with new positions in the stock are Steve Cohen’s Point72 Asset Management, Efrem Kamen’s Pura Vida Investments, and Neil Chriss’s Hutchin Hill Capital.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Molina Healthcare, Inc. (NYSE:MOH) but similarly valued. We will take a look at PNM Resources, Inc. (NYSE:PNM), Physicians Realty Trust (NYSE:DOC), Aspen Insurance Holdings Limited (NYSE:AHL), and Dycom Industries, Inc. (NYSE:DY). This group of stocks’ market caps are similar to MOH’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PNM 13 161561 3
DOC 17 64765 -3
AHL 17 216738 -3
DY 34 505343 2

As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $237 million. That figure was $537 million in MOH’s case. Dycom Industries, Inc. (NYSE:DY) is the most popular stock in this table. On the other hand PNM Resources, Inc. (NYSE:PNM) is the least popular one with only 13 bullish hedge fund positions. Molina Healthcare, Inc. (NYSE:MOH) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard DY might be a better candidate to consider a long position.

Disclosure: none.

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