The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards BioLife Solutions, Inc. (NASDAQ:BLFS).
BioLife Solutions, Inc. (NASDAQ:BLFS) shareholders have witnessed a decrease in activity from the world's largest hedge funds recently. BLFS was in 9 hedge funds' portfolios at the end of March. There were 13 hedge funds in our database with BLFS holdings at the end of the previous quarter. Our calculations also showed that BLFS isn't among the 30 most popular stocks among hedge funds (click for Q1 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.
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' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
[caption id="attachment_69704" align="aligncenter" width="398"] Andrew Sandler of Sandler Capital Management[/caption]
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, We take a look at lists like the top 15 defense contractors in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now let's analyze the fresh hedge fund action regarding BioLife Solutions, Inc. (NASDAQ:BLFS).
Hedge fund activity in BioLife Solutions, Inc. (NASDAQ:BLFS)
Heading into the second quarter of 2020, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a change of -31% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BLFS over the last 18 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Casdin Capital held the most valuable stake in BioLife Solutions, Inc. (NASDAQ:BLFS), which was worth $23.5 million at the end of the third quarter. On the second spot was Park West Asset Management which amassed $9.3 million worth of shares. Royce & Associates, Sandler Capital Management, and Marshall Wace LLP 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 Casdin Capital allocated the biggest weight to BioLife Solutions, Inc. (NASDAQ:BLFS), around 2.49% of its 13F portfolio. Park West Asset Management is also relatively very bullish on the stock, setting aside 0.63 percent of its 13F equity portfolio to BLFS.
Due to the fact that BioLife Solutions, Inc. (NASDAQ:BLFS) has faced falling interest from the aggregate hedge fund industry, logic holds that there exists a select few hedge funds who sold off their positions entirely heading into Q4. Intriguingly, Richard Driehaus's Driehaus Capital dumped the biggest investment of the 750 funds followed by Insider Monkey, worth an estimated $7.7 million in stock. Thomas E. Claugus's fund, GMT Capital, also cut its stock, about $4.1 million worth. These moves are important to note, as total hedge fund interest was cut by 4 funds heading into Q4.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as BioLife Solutions, Inc. (NASDAQ:BLFS) but similarly valued. We will take a look at Titan Machinery Inc. (NASDAQ:TITN), Radiant Logistics, Inc. (NYSE:RLGT), Protagonist Therapeutics, Inc. (NASDAQ:PTGX), and Recro Pharma Inc (NASDAQ:REPH). This group of stocks' market valuations match BLFS's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TITN,8,10682,1 RLGT,11,7323,-2 PTGX,15,48172,-2 REPH,11,40930,-6 Average,11.25,26777,-2.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.25 hedge funds with bullish positions and the average amount invested in these stocks was $27 million. That figure was $43 million in BLFS's case. Protagonist Therapeutics, Inc. (NASDAQ:PTGX) is the most popular stock in this table. On the other hand Titan Machinery Inc. (NASDAQ:TITN) is the least popular one with only 8 bullish hedge fund positions. BioLife Solutions, Inc. (NASDAQ:BLFS) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd and still beat the market by 15.9 percentage points. A small number of hedge funds were also right about betting on BLFS as the stock returned 67.3% during the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.