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Is Aziyo Biologics, Inc. (AZYO) Going to Burn These Hedge Funds?

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The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Aziyo Biologics, Inc. (NASDAQ:AZYO).

Is Aziyo Biologics, Inc. (NASDAQ:AZYO) going to take off soon? Hedge funds were getting less bullish. The number of bullish hedge fund bets decreased by 1 recently. Aziyo Biologics, Inc. (NASDAQ:AZYO) was in 6 hedge funds' portfolios at the end of March. The all time high for this statistic is 7. Our calculations also showed that AZYO isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Today there are a lot of methods shareholders can use to grade their stock investments. Two of the less utilized methods are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the top hedge fund managers can trounce the broader indices by a significant margin (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Richard Driehaus of Driehaus Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $24 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Now we're going to take a look at the key hedge fund action surrounding Aziyo Biologics, Inc. (NASDAQ:AZYO).

Do Hedge Funds Think AZYO Is A Good Stock To Buy Now?

At first quarter's end, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -14% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards AZYO over the last 23 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Endurant Capital Management was the largest shareholder of Aziyo Biologics, Inc. (NASDAQ:AZYO), with a stake worth $8.1 million reported as of the end of March. Trailing Endurant Capital Management was Driehaus Capital, which amassed a stake valued at $4.2 million. Platinum Asset Management, Millennium Management, and GLG Partners were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Endurant Capital Management allocated the biggest weight to Aziyo Biologics, Inc. (NASDAQ:AZYO), around 2.1% of its 13F portfolio. Driehaus Capital is also relatively very bullish on the stock, designating 0.06 percent of its 13F equity portfolio to AZYO.

Since Aziyo Biologics, Inc. (NASDAQ:AZYO) has faced falling interest from the smart money, it's easy to see that there is a sect of money managers who sold off their full holdings by the end of the first quarter. Interestingly, Ken Griffin's Citadel Investment Group sold off the biggest position of the 750 funds tracked by Insider Monkey, totaling close to $1.5 million in stock, and Stuart J. Zimmer's Zimmer Partners was right behind this move, as the fund said goodbye to about $0.7 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 1 funds by the end of the first quarter.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Aziyo Biologics, Inc. (NASDAQ:AZYO) but similarly valued. These stocks are Hepion Pharmaceuticals, Inc. (NASDAQ:HEPA), Navios Maritime Holdings Inc. (NYSE:NM), Orgenesis Inc. (NASDAQ:ORGS), United Security Bancshares (NASDAQ:UBFO), Radcom Ltd. (NASDAQ:RDCM), ACRES Commercial Realty Corp. (NYSE:ACR), and Grindrod Shipping Holdings Ltd. (NASDAQ:GRIN). All of these stocks' market caps resemble AZYO's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position HEPA,4,1131,0 NM,5,8952,4 ORGS,3,1715,1 UBFO,2,1717,-1 RDCM,3,10000,0 ACR,5,16149,-4 GRIN,2,8427,1 Average,3.4,6870,0.1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 3.4 hedge funds with bullish positions and the average amount invested in these stocks was $7 million. That figure was $15 million in AZYO's case. Navios Maritime Holdings Inc. (NYSE:NM) is the most popular stock in this table. On the other hand United Security Bancshares (NASDAQ:UBFO) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Aziyo Biologics, Inc. (NASDAQ:AZYO) is more popular among hedge funds. Our overall hedge fund sentiment score for AZYO is 79.7. 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. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 19.3% in 2021 through June 25th and still beat the market by 4.8 percentage points. Unfortunately AZYO wasn't nearly as popular as these 5 stocks and hedge funds that were betting on AZYO were disappointed as the stock returned -22.1% since the end of the first quarter (through 6/25) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.