Chemed Corporation (CHE): Hedge Funds Are Bullish and Insiders Are Undecided, What Should You Do?
What's a smart Chemed Corporation (NYSE:CHE) investor to do?
In today’s marketplace, there are a multitude of methods market participants can use to watch Mr. Market. Some of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best investment managers can outclass the S&P 500 by a superb margin (see just how much).
Just as necessary, bullish insider trading activity is a second way to analyze the stock market universe. Obviously, there are a number of stimuli for a corporate insider to sell shares of his or her company, but just one, very clear reason why they would buy. Various empirical studies have demonstrated the useful potential of this tactic if investors understand where to look (learn more here).
Now that that's out of the way, let's analyze the newest info about Chemed Corporation (NYSE:CHE).
Hedge fund activity in Chemed Corporation (NYSE:CHE)
At the end of the second quarter, a total of 13 of the hedge funds we track were bullish in this stock, a change of 63% from the first quarter. With the smart money's capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were increasing their stakes considerably.
When using filings from the hedgies we track, Chuck Royce's Royce & Associates had the biggest position in Chemed Corporation (NYSE:CHE), worth close to $102.3 million, comprising 0.3% of its total 13F portfolio. On Royce & Associates's heels is GAMCO Investors, managed by Mario Gabelli, which held a $62.3 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Cliff Asness's AQR Capital Management, Alok Agrawal's Bloom Tree Partners and Joel Greenblatt's Gotham Asset Management.
With a general bullishness amongst the titans, certain bigger names were breaking ground themselves. Royce & Associates, managed by Chuck Royce, initiated the largest position in Chemed Corporation (NYSE:CHE). Royce & Associates had 102.3 million invested in the company at the end of the quarter. Mario Gabelli's GAMCO Investors also made a $62.3 million investment in the stock during the quarter. The other funds with brand new CHE positions are Ken Griffin's Citadel Investment Group, Howard Guberman's Gruss Asset Management, and Cliff Asness's AQR Capital Management.
How are insiders trading Chemed Corporation (NYSE:CHE)?
Insider buying is most useful when the company we're looking at has seen transactions within the past six months. Over the last half-year time frame, Chemed Corporation (NYSE:CHE) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We'll also examine the relationship between both of these indicators in other stocks similar to Chemed Corporation (NYSE:CHE). These stocks are Addus Homecare Corporation (NASDAQ:ADUS), Almost Family, Inc. (NASDAQ:AFAM), Gentiva Health Services, Inc. (NASDAQ:GTIV), Amedisys Inc (NASDAQ:AMED), and LHC Group, Inc. (NASDAQ:LHCG). All of these stocks are in the home health care industry and their market caps are similar to CHE's market cap.
# of Hedge Funds
# of Insiders Buying
# of Insiders Selling
Addus Homecare Corporation (NASDAQ:ADUS)
Almost Family, Inc. (NASDAQ:AFAM)
Gentiva Health Services, Inc. (NASDAQ:GTIV)
Amedisys Inc (NASDAQ:AMED)
LHC Group, Inc. (NASDAQ:LHCG)
Using the returns shown by Insider Monkey's tactics, regular investors must always track hedge fund and insider trading activity, and Chemed Corporation (NYSE:CHE) shareholders fit into this picture quite nicely.