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With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter of 2021. One of these stocks was Bio-Techne Corporation (NASDAQ:TECH).
Bio-Techne Corporation (NASDAQ:TECH) has seen a decrease in hedge fund sentiment lately. Bio-Techne Corporation (NASDAQ:TECH) was in 23 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 30. Our calculations also showed that TECH isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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. Hedge funds have more than $3.5 trillion in assets under management, so you can't expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds' moves today.
Louis Navellier of Navellier & Associates
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind we're going to take a gander at the new hedge fund action encompassing Bio-Techne Corporation (NASDAQ:TECH).
Do Hedge Funds Think TECH Is A Good Stock To Buy Now?
At the end of March, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -4% from the fourth quarter of 2020. By comparison, 26 hedge funds held shares or bullish call options in TECH a year ago. With the smart money's capital changing hands, there exists a few notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Among these funds, Select Equity Group held the most valuable stake in Bio-Techne Corporation (NASDAQ:TECH), which was worth $71.2 million at the end of the fourth quarter. On the second spot was Millennium Management which amassed $69.6 million worth of shares. Royce & Associates, Point72 Asset Management, and Montanaro Asset 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 Montanaro Asset Management allocated the biggest weight to Bio-Techne Corporation (NASDAQ:TECH), around 4.34% of its 13F portfolio. Sandler Capital Management is also relatively very bullish on the stock, designating 2.51 percent of its 13F equity portfolio to TECH.
Seeing as Bio-Techne Corporation (NASDAQ:TECH) has faced declining sentiment from hedge fund managers, we can see that there lies a certain "tier" of funds that slashed their full holdings in the first quarter. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital said goodbye to the biggest investment of all the hedgies watched by Insider Monkey, totaling an estimated $22.7 million in stock, and Ed Bosek's BeaconLight Capital was right behind this move, as the fund said goodbye to about $3.8 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 1 funds in the first quarter.
Let's check out 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 Liberty Global plc (NASDAQ:LBTYA), The Boston Beer Company Inc (NYSE:SAM), Devon Energy Corporation (NYSE:DVN), Ares Management Corp (NYSE:ARES), Cognex Corporation (NASDAQ:CGNX), Lumen Technologies, Inc. (NYSE:LUMN), and News Corp (NASDAQ:NWS). All of these stocks' market caps are closest to TECH's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LBTYA,35,848078,-1 SAM,29,903673,-6 DVN,52,1466337,7 ARES,16,565174,-4 CGNX,34,498509,3 LUMN,32,1004948,3 NWS,21,168400,10 Average,31.3,779303,1.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.3 hedge funds with bullish positions and the average amount invested in these stocks was $779 million. That figure was $412 million in TECH's case. Devon Energy Corporation (NYSE:DVN) is the most popular stock in this table. On the other hand Ares Management Corp (NYSE:ARES) is the least popular one with only 16 bullish hedge fund positions. Bio-Techne Corporation (NASDAQ:TECH) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for TECH is 36.7. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and still beat the market by 7.7 percentage points. A small number of hedge funds were also right about betting on TECH as the stock returned 20.2% since the end of the first quarter (through 7/16) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.