market folly

In a 13G filed with the SEC, Steven Cohen's hedge fund firm SAC Capital has disclosed an 8.7% ownership stake in Psychiatric Solutions (PSYS) with 4,873,406 shares. The disclosure was made due to activity on March 12th, 2010 and this is a massive increase over their previous position of only 45,498 shares from December 31st, 2009. In the past three months, they've increased their stake by over 10,611%, adding 4,827,908 more shares. PSYS of course has been a takeover target as of late and it's clear that SAC thinks that a transaction will eventually occur.

SAC Capital finished 2009 up over 28% as noted in our post on hedge fund 2009 performance numbers. Famed manager Stevie Cohen of course was recently featured in Forbes' billionaire list as well.

Taken from Google Finance, Psychiatric Solutions (PSYS) is "a provider of inpatient behavioral healthcare services in the United States. The Company’s other behavioral healthcare business primarily consists of its contract management and a managed care plan in Puerto Rico. Its contract management business involves the development, organization and management of behavioral healthcare and rehabilitation programs within medical/surgical hospitals."

In terms of other recent activity out of the famous hedge fund, we've previously detailed some of SAC's other portfolio moves for those interested.