How do we determine whether Health Insurance Innovations Inc (NASDAQ:HIIQ) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
Is Health Insurance Innovations Inc (NASDAQ:HIIQ) ready to rally soon? Investors who are in the know are getting more bullish. The number of bullish hedge fund bets moved up by 4 in recent months. Our calculations also showed that hiiq isn't among the 30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to go over the recent hedge fund action surrounding Health Insurance Innovations Inc (NASDAQ:HIIQ).
Hedge fund activity in Health Insurance Innovations Inc (NASDAQ:HIIQ)
Heading into the second quarter of 2019, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 22% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards HIIQ over the last 15 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Hunt Lane Capital, managed by Dennis Puri and Oliver Keller, holds the largest position in Health Insurance Innovations Inc (NASDAQ:HIIQ). Hunt Lane Capital has a $24.1 million position in the stock, comprising 3.3% of its 13F portfolio. Sitting at the No. 2 spot is J. Carlo Cannell of Cannell Capital, with a $23.8 million position; the fund has 5.8% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions include Amy Minella's Cardinal Capital, Claus Moller's P2 Capital Partners and Israel Englander's Millennium Management.
As one would reasonably expect, some big names have been driving this bullishness. Hunt Lane Capital, managed by Dennis Puri and Oliver Keller, created the largest position in Health Insurance Innovations Inc (NASDAQ:HIIQ). Hunt Lane Capital had $24.1 million invested in the company at the end of the quarter. Ron Bobman's Capital Returns Management also made a $4.4 million investment in the stock during the quarter. The following funds were also among the new HIIQ investors: Daniel S. Och's OZ Management, Philip Hempleman's Ardsley Partners, and D. E. Shaw's D E Shaw.
Let's now review hedge fund activity in other stocks similar to Health Insurance Innovations Inc (NASDAQ:HIIQ). These stocks are AudioCodes Ltd. (NASDAQ:AUDC), Century Bancorp, Inc. (NASDAQ:CNBKA), Ultra Clean Holdings Inc (NASDAQ:UCTT), and ImmunoGen, Inc. (NASDAQ:IMGN). All of these stocks' market caps are similar to HIIQ's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AUDC,14,21544,3 CNBKA,2,11330,-1 UCTT,9,45721,-1 IMGN,16,69185,0 Average,10.25,36945,0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $37 million. That figure was $154 million in HIIQ's case. ImmunoGen, Inc. (NASDAQ:IMGN) is the most popular stock in this table. On the other hand Century Bancorp, Inc. (NASDAQ:CNBKA) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Health Insurance Innovations Inc (NASDAQ:HIIQ) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately HIIQ wasn't nearly as popular as these 20 stocks and hedge funds that were betting on HIIQ were disappointed as the stock returned -12.5% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published at Insider Monkey.