Wilmot Harkey – Nantahala Capital Reported 5.15% Stake in $SUNH

Wilmot Harkey’s Nantahala Capital Management LLC acquired 1.3 M shares of Sun Healthcare Group Inc on November 2nd, after this transaction Nantahala Capital holds 5.15% of the company. The stock currently trades at $3.13, and lost 75% so far in 2011. Nantahala Capital Management did not have any shares in SUNH at the end of Q2. Nantahala probably paid less than the current market price of the stock, and it should have seen the drop in the price as a buying opportunity.


There are other hedge fund managers who’ve been bullish about Sun Healthcare Group Inc. Glenn Russell Dubin’s Highbridge Capital has the second largest shares of SUNH with 247 thousand; in other words, holds 0.98% of the company. Highbridge Capital increased its position in SUNH by 744% in the second quarter of this year. Nelson Obus’s Wynnefield Capital has 210 thousand shares, or nearly 0.83% of the company. According to the filings, Wynnefield Capital did not have any shares of SUNH at the end of Q1. Israel Englander’s Millennium Management has the third largest chunk of shares. He owns 70 thousand shares, which is 0.28% of the company.

Nantahala Capital Management LLC serves as a financial investment advisory to its customers. Its clients include security portfolios, institutions, and businesses. Nantahala Capital’s investment strategy includes investing in small cap stocks, and using fixed-income instruments. Wilmot B. Harkey and Daniel Mack are serving as the manager partners of the firm. Nantahala Capital managed to beat the Russell 2000 index by 25 percentage points per year between August 2004 and April 2009.

According to the Yahoo Finance; Sun Healthcare Group, Inc. “provides health care services primarily for senior population in the United States. The company’s Inpatient Services segment operates skilled nursing centers, assisted and independent living centers, and mental health centers that provide services for individuals requiring assistance for activities in daily living. The skilled nursing centers provide daily nursing, therapeutic rehabilitation, social services, housekeeping, nutrition, and administrative services; assisted living centers offer minimal nursing assistance, housekeeping, nutrition, laundry, and administrative services; independent living centers provide security, housekeeping, nutrition, and limited laundry services; and mental health centers offer a range of inpatient and outpatient behavioral health services for adults and children through specialized treatment programs. It also provides hospice services, including palliative care, social services, pain management, and spiritual counseling. As of December 31, 2010, this segment operated 164 skilled nursing centers; 16 combined skilled nursing, assisted, and independent living centers; 10 assisted living centers; 2 independent living centers; and 8 mental health centers with an aggregate of 23,053 licensed beds in 25 states. Its Rehabilitation Therapy Services segment offers various rehabilitation therapy services, including speech pathology, physical therapy, and occupational therapy for approximately 508 centers in 36 states. The company’s Medical Staffing Services segment provides licensed therapists in the areas of physical, occupational, and speech therapy; nurses; pharmacists, pharmacist technicians, and medical imaging technicians; physicians; and related medical personnel. It serves skilled nursing centers, schools, and prisons in 36 states. Sun Healthcare Group, Inc. was founded in 1989 and is based in Irvine, California.”