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 Bio-Rad Laboratories, Inc. (NYSE:BIO) in this article.
Is BIO a good stock to buy now? Bio-Rad Laboratories, Inc. (NYSE:BIO) shareholders have witnessed a decrease in activity from the world's largest hedge funds in recent months. Bio-Rad Laboratories, Inc. (NYSE:BIO) was in 48 hedge funds' portfolios at the end of September. The all time high for this statistic is 54. There were 54 hedge funds in our database with BIO holdings at the end of June. Our calculations also showed that BIO 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.
At the moment there are many gauges stock market investors have at their disposal to evaluate publicly traded companies. A couple of the most innovative gauges are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the elite money managers can trounce their index-focused peers by a very impressive amount (see the details here).
Rajiv Jain of GQG Partners
Rajiv Jain of GQG Partners
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy 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. Keeping this in mind let's take a gander at the key hedge fund action surrounding Bio-Rad Laboratories, Inc. (NYSE:BIO).
Do Hedge Funds Think BIO Is A Good Stock To Buy Now?
At the end of September, a total of 48 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -11% from one quarter earlier. On the other hand, there were a total of 44 hedge funds with a bullish position in BIO a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
The largest stake in Bio-Rad Laboratories, Inc. (NYSE:BIO) was held by GQG Partners, which reported holding $182.6 million worth of stock at the end of September. It was followed by Marshall Wace LLP with a $144.6 million position. Other investors bullish on the company included AQR Capital Management, Intermede Investment Partners, and Fisher Asset Management. In terms of the portfolio weights assigned to each position Tower House Partners allocated the biggest weight to Bio-Rad Laboratories, Inc. (NYSE:BIO), around 24.85% of its 13F portfolio. Intermede Investment Partners is also relatively very bullish on the stock, designating 3.9 percent of its 13F equity portfolio to BIO.
Because Bio-Rad Laboratories, Inc. (NYSE:BIO) has faced bearish sentiment from the entirety of the hedge funds we track, it's easy to see that there was a specific group of funds that decided to sell off their full holdings by the end of the third quarter. At the top of the heap, John Overdeck and David Siegel's Two Sigma Advisors cut the largest position of all the hedgies monitored by Insider Monkey, comprising an estimated $9.4 million in stock, and Steve Cohen's Point72 Asset Management was right behind this move, as the fund said goodbye to about $6.5 million worth. These moves are interesting, as total hedge fund interest was cut by 6 funds by the end of the third quarter.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Bio-Rad Laboratories, Inc. (NYSE:BIO) but similarly valued. We will take a look at Synchrony Financial (NYSE:SYF), XPeng Inc. (NYSE:XPEV), DISH Network Corp. (NASDAQ:DISH), Broadridge Financial Solutions, Inc. (NYSE:BR), Fifth Third Bancorp (NASDAQ:FITB), Expeditors International of Washington, Inc. (NASDAQ:EXPD), and Ryanair Holdings plc (NASDAQ:RYAAY). All of these stocks' market caps resemble BIO's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SYF,46,1962420,0 XPEV,26,214330,26 DISH,60,1594539,6 BR,33,244445,9 FITB,30,358412,-2 EXPD,31,528714,-2 RYAAY,16,659788,-5 Average,34.6,794664,4.6 [/table]
As you can see these stocks had an average of 34.6 hedge funds with bullish positions and the average amount invested in these stocks was $795 million. That figure was $1165 million in BIO's case. DISH Network Corp. (NASDAQ:DISH) is the most popular stock in this table. On the other hand Ryanair Holdings plc (NASDAQ:RYAAY) is the least popular one with only 16 bullish hedge fund positions. Bio-Rad Laboratories, Inc. (NYSE:BIO) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BIO is 62. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. 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 beat the market again by 16.2 percentage points. Unfortunately BIO wasn't nearly as popular as these 20 stocks and hedge funds that were betting on BIO were disappointed as the stock returned 8.5% since the end of September (through 12/8) 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 many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.
