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Should You Follow Hedge Funds Into Healthways, Inc. (HWAY)?

As industry-wide interest jumped, some big names were leading the bulls’ herd. Point72 Asset Management, managed by Steve Cohen, established the most outsized position in Healthways, Inc. (NASDAQ:HWAY). Point72 Asset Management had $4.5 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $4 million investment in the stock during the quarter. The other funds with new positions in the stock are Joseph Edelman’s Perceptive Advisors, Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Healthways, Inc. (NASDAQ:HWAY) but similarly valued. We will take a look at Modine Manufacturing Co. (NYSE:MOD), Stoneridge, Inc. (NYSE:SRI), Arena Pharmaceuticals, Inc. (NASDAQ:ARNA), and PJT Partners Inc (NYSE:PJT). This group of stocks’ market values are similar to HWAY’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MOD 10 43734 -1
SRI 24 100450 3
ARNA 9 32610 0
PJT 10 141761 -4

As you can see these stocks had an average of 13.25 hedge funds with bullish positions and the average amount invested in these stocks was $80 million. That figure was $279 million in HWAY’s case. Stoneridge, Inc. (NYSE:SRI) is the most popular stock in this table. On the other hand Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) is the least popular one with only 9 bullish hedge fund positions. Healthways, Inc. (NASDAQ:HWAY) 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 SRI might be a better candidate to consider a long position.

Disclosure: None

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