Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 817 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds' 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about AdaptHealth Corp. (NASDAQ:AHCO) in this article.
Is AHCO a good stock to buy now? AdaptHealth Corp. (NASDAQ:AHCO) shareholders have witnessed an increase in hedge fund sentiment of late. AdaptHealth Corp. (NASDAQ:AHCO) was in 14 hedge funds' portfolios at the end of September. The all time high for this statistic is 14. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 12 hedge funds in our database with AHCO positions at the end of the second quarter. Our calculations also showed that AHCO isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are dozens of tools investors put to use to appraise their stock investments. A pair of the less utilized tools are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the top picks of the top money managers can outperform the broader indices by a superb amount (see the details here).
BlueMountain Capital Management's Returns, AUM and Holdings
Andrew Feldstein and Stephen Siderow of Blue Mountain Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now we're going to take a look at the latest hedge fund action surrounding AdaptHealth Corp. (NASDAQ:AHCO).
Do Hedge Funds Think AHCO Is A Good Stock To Buy Now?
At the end of September, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 17% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in AHCO over the last 21 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in AdaptHealth Corp. (NASDAQ:AHCO) was held by Blue Mountain Capital, which reported holding $79.5 million worth of stock at the end of September. It was followed by Polar Capital with a $37.8 million position. Other investors bullish on the company included Deerfield Management, Alyeska Investment Group, and Driehaus Capital. In terms of the portfolio weights assigned to each position Blue Mountain Capital allocated the biggest weight to AdaptHealth Corp. (NASDAQ:AHCO), around 100% of its 13F portfolio. Endurant Capital Management is also relatively very bullish on the stock, designating 3.34 percent of its 13F equity portfolio to AHCO.
As one would reasonably expect, specific money managers were breaking ground themselves. Polar Capital, managed by Brian Ashford-Russell and Tim Woolley, created the biggest position in AdaptHealth Corp. (NASDAQ:AHCO). Polar Capital had $37.8 million invested in the company at the end of the quarter. Justin John Ferayorni's Tamarack Capital Management also initiated a $6.7 million position during the quarter. The other funds with new positions in the stock are Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, Paul Marshall and Ian Wace's Marshall Wace LLP, and John M. Angelo and Michael L. Gordon's Angelo Gordon & Co.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as AdaptHealth Corp. (NASDAQ:AHCO) but similarly valued. These stocks are CryoPort, Inc. (NASDAQ:CYRX), Eldorado Gold Corp (NYSE:EGO), Avis Budget Group Inc. (NASDAQ:CAR), ServisFirst Bancshares, Inc. (NASDAQ:SFBS), Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL), Sanmina Corporation (NASDAQ:SANM), and Rogers Corporation (NYSE:ROG). All of these stocks' market caps are similar to AHCO's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CYRX,19,162892,7 EGO,15,231959,3 CAR,34,835613,13 SFBS,8,6464,-1 MDGL,15,507679,0 SANM,15,135028,-5 ROG,19,94135,6 Average,17.9,281967,3.3 [/table]
As you can see these stocks had an average of 17.9 hedge funds with bullish positions and the average amount invested in these stocks was $282 million. That figure was $252 million in AHCO's case. Avis Budget Group Inc. (NASDAQ:CAR) is the most popular stock in this table. On the other hand ServisFirst Bancshares, Inc. (NASDAQ:SFBS) is the least popular one with only 8 bullish hedge fund positions. AdaptHealth Corp. (NASDAQ:AHCO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AHCO is 48.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on AHCO as the stock returned 71.6% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
