We can judge whether Bio-Rad Laboratories, Inc. (NYSE:BIO) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There's no better way to get these firms' immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market when we factor in known risk factors.
Bio-Rad Laboratories, Inc. (NYSE:BIO) has experienced an increase in enthusiasm from smart money of late. BIO was in 39 hedge funds' portfolios at the end of September. There were 36 hedge funds in our database with BIO positions at the end of the previous quarter. Our calculations also showed that BIO isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
According to most investors, hedge funds are perceived as unimportant, outdated financial tools of years past. While there are over 8000 funds trading at present, We choose to focus on the aristocrats of this club, about 750 funds. These investment experts shepherd the majority of the hedge fund industry's total capital, and by keeping track of their unrivaled investments, Insider Monkey has identified numerous investment strategies that have historically beaten Mr. Market. Insider Monkey's flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points a year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
[caption id="attachment_731890" align="aligncenter" width="600"] John Rogers of Ariel Investments[/caption]
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world's most bearish hedge fund that's more convinced than ever that a crash is coming, our long-short investment strategy doesn't rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds' buy/sell signals. We're going to go over the fresh hedge fund action regarding Bio-Rad Laboratories, Inc. (NYSE:BIO).
What does smart money think about Bio-Rad Laboratories, Inc. (NYSE:BIO)?
At the end of the third quarter, a total of 39 of the hedge funds tracked by Insider Monkey were long this stock, a change of 8% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BIO over the last 17 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, Millennium Management was the largest shareholder of Bio-Rad Laboratories, Inc. (NYSE:BIO), with a stake worth $156.8 million reported as of the end of September. Trailing Millennium Management was Levin Easterly Partners, which amassed a stake valued at $90.9 million. Fisher Asset Management, Ariel Investments, and Polar Capital 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 Tower House Partners allocated the biggest weight to Bio-Rad Laboratories, Inc. (NYSE:BIO), around 52.68% of its portfolio. Tamarack Capital Management is also relatively very bullish on the stock, setting aside 9.97 percent of its 13F equity portfolio to BIO.
With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Miura Global Management, managed by Pasco Alfaro / Richard Tumure, assembled the most valuable position in Bio-Rad Laboratories, Inc. (NYSE:BIO). Miura Global Management had $25 million invested in the company at the end of the quarter. Joseph Edelman's Perceptive Advisors also made a $21.6 million investment in the stock during the quarter. The other funds with brand new BIO positions are Michael Gelband's ExodusPoint Capital, Principal Global Investors's Columbus Circle Investors, and Benjamin A. Smith's Laurion Capital Management.
Let's also examine hedge fund activity in other stocks similar to Bio-Rad Laboratories, Inc. (NYSE:BIO). These stocks are Marathon Oil Corporation (NYSE:MRO), Comerica Incorporated (NYSE:CMA), Teradyne, Inc. (NASDAQ:TER), and Datadog, Inc. (NASDAQ:DDOG). This group of stocks' market caps are similar to BIO's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MRO,35,394969,3 CMA,28,468164,-4 TER,31,1128584,4 DDOG,39,208582,39 Average,33.25,550075,10.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.25 hedge funds with bullish positions and the average amount invested in these stocks was $550 million. That figure was $1091 million in BIO's case. Datadog, Inc. (NASDAQ:DDOG) is the most popular stock in this table. On the other hand Comerica Incorporated (NYSE:CMA) is the least popular one with only 28 bullish hedge fund positions. Bio-Rad Laboratories, Inc. (NYSE:BIO) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on BIO as the stock returned 11% during the fourth quarter (through the end of November) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.