U.S. Markets closed

Hedge Funds Dropped The Ball On Bio-Techne Corporation (TECH)

Reymerlyn Martin

Reputable billionaire investors such as Jim Simons, Cliff Asness and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won't accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.

Bio-Techne Corporation (NASDAQ:TECH) investors should pay attention to a decrease in enthusiasm from smart money lately. Our calculations also showed that TECH isn't among the 30 most popular stocks among hedge funds.

To the average investor there are dozens of signals market participants put to use to appraise their stock investments. Some of the most under-the-radar signals are hedge fund and insider trading interest. We have shown that, historically, those who follow the best picks of the best fund managers can outperform their index-focused peers by a superb margin (see the details here).

Chuck Royce

We're going to take a look at the recent hedge fund action regarding Bio-Techne Corporation (NASDAQ:TECH).

How have hedgies been trading Bio-Techne Corporation (NASDAQ:TECH)?

At the end of the fourth quarter, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -6% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards TECH over the last 14 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).

TECH_apr2019

Among these funds, Renaissance Technologies held the most valuable stake in Bio-Techne Corporation (NASDAQ:TECH), which was worth $89.9 million at the end of the third quarter. On the second spot was AQR Capital Management which amassed $54 million worth of shares. Moreover, 12 West Capital Management, Royce & Associates, and Select Equity Group were also bullish on Bio-Techne Corporation (NASDAQ:TECH), allocating a large percentage of their portfolios to this stock.

Seeing as Bio-Techne Corporation (NASDAQ:TECH) has experienced a decline in interest from the entirety of the hedge funds we track, it's safe to say that there were a few hedge funds that decided to sell off their positions entirely in the third quarter. Interestingly, Andrew Sandler's Sandler Capital Management sold off the largest stake of the "upper crust" of funds watched by Insider Monkey, worth an estimated $8 million in stock. Michael Platt and William Reeves's fund, BlueCrest Capital Mgmt., also cut its stock, about $0.4 million worth. These moves are important to note, as total hedge fund interest was cut by 1 funds in the third quarter.

Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Bio-Techne Corporation (NASDAQ:TECH) but similarly valued. We will take a look at People's United Financial, Inc. (NASDAQ:PBCT), Charles River Laboratories International Inc. (NYSE:CRL), Hubbell Incorporated (NYSE:HUBB), and athenahealth, Inc (NASDAQ:ATHN). This group of stocks' market caps match TECH's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PBCT,22,118312,2 CRL,28,699016,8 HUBB,24,449250,-3 ATHN,26,738702,-1 Average,25,501320,1.5 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $501 million. That figure was $298 million in TECH's case. Charles River Laboratories International Inc. (NYSE:CRL) is the most popular stock in this table. On the other hand People's United Financial, Inc. (NASDAQ:PBCT) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocks Bio-Techne Corporation (NASDAQ:TECH) is even less popular than PBCT. Our calculations showed that top 15 most popular stocks among hedge funds returned 21.3% through April 8th and outperformed the S&P 500 ETF (SPY) by more than 5 percentage points. A few hedge funds were also right about betting on TECH as the stock returned 39.6% and outperformed the market as well. You can see the entire list of these shrewd hedge funds here.

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

Related Content