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Hedge Funds Cashed Out Of Dyadic International, Inc. (DYAI)

Debasis Saha

We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of Dyadic International, Inc. (NASDAQ:DYAI) based on that data.

Dyadic International, Inc. (NASDAQ:DYAI) has experienced a decrease in activity from the world's largest hedge funds of late. Our calculations also showed that DYAI 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.

Today there are many methods shareholders have at their disposal to assess stocks. A duo of the best methods are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the top picks of the elite money managers can trounce the market by a healthy margin (see the details here).

[caption id="attachment_315176" align="aligncenter" width="400"] Michael Castor of Sio Capital[/caption]

Michael Castor of Sio Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We interview hedge fund managers and ask them about their best ideas. You can watch our latest hedge fund manager interview here and find out the name of the large-cap healthcare stock that Sio Capital's Michael Castor expects to double. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let's take a glance at the fresh hedge fund action regarding Dyadic International, Inc. (NASDAQ:DYAI).

What does smart money think about Dyadic International, Inc. (NASDAQ:DYAI)?

Heading into the second quarter of 2020, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -63% from the fourth quarter of 2019. On the other hand, there were a total of 0 hedge funds with a bullish position in DYAI a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is DYAI A Good Stock To Buy?

Among these funds, Bandera Partners held the most valuable stake in Dyadic International, Inc. (NASDAQ:DYAI), which was worth $3.5 million at the end of the third quarter. On the second spot was Sio Capital which amassed $0.9 million worth of shares. Millennium Management was 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 Bandera Partners allocated the biggest weight to Dyadic International, Inc. (NASDAQ:DYAI), around 2.99% of its 13F portfolio. Sio Capital is also relatively very bullish on the stock, setting aside 0.31 percent of its 13F equity portfolio to DYAI.

Since Dyadic International, Inc. (NASDAQ:DYAI) has faced declining sentiment from the aggregate hedge fund industry, it's safe to say that there was a specific group of hedge funds that elected to cut their entire stakes last quarter. Intriguingly, Michael Gelband's ExodusPoint Capital cut the largest investment of the 750 funds tracked by Insider Monkey, worth about $0.3 million in stock, and David Nguyen and Nancy Oh's One68 Global Capital was right behind this move, as the fund dumped about $0.2 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 5 funds last quarter.

Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Dyadic International, Inc. (NASDAQ:DYAI) but similarly valued. We will take a look at Rockwell Medical Inc (NASDAQ:RMTI), Great Ajax Corp (NYSE:AJX), Hersha Hospitality Trust (NYSE:HT), and Evolus, Inc. (NASDAQ:EOLS). This group of stocks' market caps are similar to DYAI's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RMTI,3,492,0 AJX,6,5670,-2 HT,10,4305,-5 EOLS,12,30585,-3 Average,7.75,10263,-2.5 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 7.75 hedge funds with bullish positions and the average amount invested in these stocks was $10 million. That figure was $5 million in DYAI's case. Evolus, Inc. (NASDAQ:EOLS) is the most popular stock in this table. On the other hand Rockwell Medical Inc (NASDAQ:RMTI) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Dyadic International, Inc. (NASDAQ:DYAI) is even less popular than RMTI. 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 7.9% in 2020 through May 22nd but managed to beat the market by 15.6 percentage points. A small number of hedge funds were also right about betting on DYAI, though not to the same extent, as the stock returned 15.2% during the second quarter (through May 22nd) and outperformed the market as well.

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

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