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Is BNTX A Good Stock To Buy Now?

Abigail Fisher
·6 min read

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 817 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of September 30th, 2020. In this article we are going to take a look at smart money sentiment towards BioNTech SE (NASDAQ:BNTX).

Is BNTX a good stock to buy now? BioNTech SE (NASDAQ:BNTX) investors should pay attention to an increase in enthusiasm from smart money recently. BioNTech SE (NASDAQ:BNTX) was in 17 hedge funds' portfolios at the end of September. The all time high for this statistic is 15. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BNTX 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.

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 66 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.

Kerr Neilson of Platinum Asset Management

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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 recent hedge fund action encompassing BioNTech SE (NASDAQ:BNTX).

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

At third quarter's end, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 13% from the second quarter of 2020. On the other hand, there were a total of 0 hedge funds with a bullish position in BNTX a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Redmile Group held the most valuable stake in BioNTech SE (NASDAQ:BNTX), which was worth $85.5 million at the end of the third quarter. On the second spot was Armistice Capital which amassed $23.3 million worth of shares. Cormorant Asset Management, Platinum Asset Management, and Millennium Management 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 Redmile Group allocated the biggest weight to BioNTech SE (NASDAQ:BNTX), around 1.57% of its 13F portfolio. Cormorant Asset Management is also relatively very bullish on the stock, dishing out 0.86 percent of its 13F equity portfolio to BNTX.

Consequently, specific money managers were breaking ground themselves. Armistice Capital, managed by Steven Boyd, initiated the biggest position in BioNTech SE (NASDAQ:BNTX). Armistice Capital had $23.3 million invested in the company at the end of the quarter. Phill Gross and Robert Atchinson's Adage Capital Management also initiated a $17.3 million position during the quarter. The other funds with new positions in the stock are John Overdeck and David Siegel's Two Sigma Advisors, Srini Akkaraju and Michael Dybbs's Samsara BioCapital, and Michael Gelband's ExodusPoint Capital.

Let's now review hedge fund activity in other stocks similar to BioNTech SE (NASDAQ:BNTX). These stocks are ORIX Corporation (NYSE:IX), MPLX LP (NYSE:MPLX), StoneCo Ltd. (NASDAQ:STNE), Trip.com Group Limited (NASDAQ:TCOM), Northern Trust Corporation (NASDAQ:NTRS), Cheniere Energy Partners LP (NYSE:CQP), and TransUnion (NYSE:TRU). All of these stocks' market caps are closest to BNTX's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position IX,4,4093,0 MPLX,14,91155,1 STNE,38,2294511,3 TCOM,30,1525963,1 NTRS,28,272255,-7 CQP,3,8628,0 TRU,47,1684887,0 Average,23.4,840213,-0.3 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 23.4 hedge funds with bullish positions and the average amount invested in these stocks was $840 million. That figure was $218 million in BNTX's case. TransUnion (NYSE:TRU) is the most popular stock in this table. On the other hand Cheniere Energy Partners LP (NYSE:CQP) is the least popular one with only 3 bullish hedge fund positions. BioNTech SE (NASDAQ:BNTX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BNTX is 52.9. 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 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 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on BNTX as the stock returned 56.4% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.

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

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