This Metric Says You Are Smart to Sell U.S. Physical Therapy, Inc. (USPH): Acadia Healthcare Company Inc (ACHC), Hanger Inc (HGR)

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Is U.S. Physical Therapy, Inc. (NYSE:USPH) going to take off soon? Investors who are in the know are reducing their bets on the stock. The number of long hedge fund bets retreated by 1 recently.

Chuck Royce

In the 21st century investor’s toolkit, there are dozens of indicators market participants can use to analyze the equity markets. Some of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best hedge fund managers can outperform the broader indices by a superb amount (see just how much).

Just as integral, positive insider trading activity is a second way to parse down the financial markets. As the old adage goes: there are a variety of incentives for an executive to cut shares of his or her company, but just one, very simple reason why they would buy. Various academic studies have demonstrated the impressive potential of this method if you know where to look (learn more here).

Keeping this in mind, it’s important to take a glance at the key action surrounding U.S. Physical Therapy, Inc. (NYSE:USPH).

How have hedgies been trading U.S. Physical Therapy, Inc. (NYSE:USPH)?

In preparation for this year, a total of 5 of the hedge funds we track held long positions in this stock, a change of -17% from the third quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their holdings considerably.

According to our comprehensive database, Chuck Royce’s Royce & Associates had the biggest position in U.S. Physical Therapy, Inc. (NYSE:USPH), worth close to $38.6 million, accounting for 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Jim Simons of Renaissance Technologies, with a $13.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Joel Greenblatt’s Gotham Asset Management, John Overdeck and David Siegel’s Two Sigma Advisors and D. E. Shaw’s D E Shaw.

Judging by the fact that U.S. Physical Therapy, Inc. (NYSE:USPH) has faced bearish sentiment from hedge fund managers, it’s easy to see that there lies a certain “tier” of funds who sold off their entire stakes heading into 2013. Intriguingly, Israel Englander’s Millennium Management sold off the largest investment of the “upper crust” of funds we track, totaling about $0.6 million in stock.. Mike Vranos’s fund, Ellington, also dumped its stock, about $0.2 million worth. These transactions are interesting, as total hedge fund interest dropped by 1 funds heading into 2013.

What have insiders been doing with U.S. Physical Therapy, Inc. (NYSE:USPH)?

Bullish insider trading is best served when the primary stock in question has seen transactions within the past 180 days. Over the last six-month time period, U.S. Physical Therapy, Inc. (NYSE:USPH) has experienced 1 unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to U.S. Physical Therapy, Inc. (NYSE:USPH). These stocks are Acadia Healthcare Company Inc (NASDAQ:ACHC), Hanger Inc (NYSE:HGR), IPC The Hospitalist Company Inc (NASDAQ:IPCM), The Providence Service Corporation (NASDAQ:PRSC), and Healthways, Inc. (NASDAQ:HWAY). This group of stocks are in the specialized health services industry and their market caps match USPH’s market cap.

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