SCHEDULE: 8 Knots Management Boosts Pennant Group Stake to 7.7%

8 Knots Management and Scott Green have disclosed a beneficial ownership of 7.70% in The Pennant Group, Inc., holding 2,652,806 shares of common stock.

Summary

• 8 Knots Management, LLC and Scott Green, its managing member, collectively report beneficial ownership of 2,652,806 shares of The Pennant Group, Inc.'s Common Stock.
• This aggregate ownership represents 7.70% of the Issuer's outstanding Common Stock, based on 34,468,981 shares outstanding as of May 6, 2025.
• The shares are held through various entities, including 8 Knots Fund, LP (1,403,748 shares or 4.07%) and 8 Knots Fund II, LP (117,516 shares or 0.34%).
• 8 Knots GP, LP, as the general partner of 8 Knots Fund and 8 Knots Fund II, is deemed to beneficially own 1,521,264 shares, representing 4.41%.
• 8 Knots Management serves as an investment adviser to these funds and also manages several separately managed accounts (SMAs) and a sub-advised fund.
• Beneficial ownership is disclaimed for shares held by a Sub-Advised Fund (243,583 shares) and four of the five SMAs (totaling 802,196 shares) due to termination clauses in advisory agreements.
• 8 Knots Management and Scott Green may be deemed to have beneficial ownership of shares held by SMA-2 (85,868 shares).
• The securities were acquired and are held in the ordinary course of business and not for the purpose of changing or influencing the control of the issuer.

Sentiment

Score: 6

Explanation: The filing indicates a significant, non-activist stake by an institutional investor, which is generally a positive signal of confidence in the company. However, it's a routine disclosure and doesn't contain new operational or financial performance data.

Positives

• A significant institutional investor, 8 Knots Management, has disclosed a substantial 7.70% stake, indicating confidence in The Pennant Group, Inc.'s long-term prospects.
• The filing explicitly states the shares are held in the ordinary course of business, suggesting a passive investment rather than an activist stance that could create volatility.

Risks

• The beneficial ownership is spread across multiple funds and separately managed accounts, which could lead to complex reporting and potential changes in ownership structure over time.
• Disclaimers of beneficial ownership for a significant portion of managed shares (Sub-Advised Fund and four SMAs) introduce complexity regarding the ultimate control and influence over those specific shares.

Related Party Transactions

• 8 Knots Management, LLC is the investment manager for 8 Knots Fund, LP and 8 Knots Fund II, LP.
• 8 Knots GP, LP is the general partner of 8 Knots Fund, LP and 8 Knots Fund II, LP.
• Scott Green is the managing member of 8 Knots Management, LLC and President of 8 Knots GP, LP, establishing a control relationship across the reporting entities.

Stakeholder Impact

• Shareholders: Disclosure of a significant institutional holder can influence market perception and potentially provide a degree of stability or confidence in the stock.

Key Dates

Keywords

The Pennant Group, Common Stock, Schedule 13G, Beneficial Ownership, Institutional Investor, 8 Knots Management, Scott Green, SEC Filing, Investment Adviser, Healthcare Services