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Here is What Hedge Funds Think About IDEXX Laboratories, Inc. (IDXX)

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The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards IDEXX Laboratories, Inc. (NASDAQ:IDXX).

IDEXX Laboratories, Inc. (NASDAQ:IDXX) has seen a decrease in hedge fund interest of late. IDEXX Laboratories, Inc. (NASDAQ:IDXX) was in 39 hedge funds' portfolios at the end of the second quarter of 2021. The all time high for this statistic is 49. There were 49 hedge funds in our database with IDXX positions at the end of the first quarter. Our calculations also showed that IDXX isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

In the financial world there are dozens of metrics stock traders employ to evaluate their stock investments. A couple of the most under-the-radar metrics are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the best picks of the top investment managers can outperform the market by a solid amount (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

Kris Jenner - Rock Springs Capital
Kris Jenner - Rock Springs Capital

Kris Jenner of Rock Springs Capital Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech stock. We go through lists like the 10 best EV 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. Keeping this in mind we're going to check out the fresh hedge fund action regarding IDEXX Laboratories, Inc. (NASDAQ:IDXX).

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

At the end of June, a total of 39 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -20% from the previous quarter. By comparison, 40 hedge funds held shares or bullish call options in IDXX a year ago. With hedge funds' capital changing hands, there exists an "upper tier" of notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Fundsmith LLP, managed by Terry Smith, holds the most valuable position in IDEXX Laboratories, Inc. (NASDAQ:IDXX). Fundsmith LLP has a $2.6793 billion position in the stock, comprising 7.4% of its 13F portfolio. Sitting at the No. 2 spot is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $175.4 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions include Greg Poole's Echo Street Capital Management, Kris Jenner, Gordon Bussard, Graham McPhail's Rock Springs Capital Management and Robert Joseph Caruso's Select Equity Group. In terms of the portfolio weights assigned to each position Fundsmith LLP allocated the biggest weight to IDEXX Laboratories, Inc. (NASDAQ:IDXX), around 7.42% of its 13F portfolio. Montanaro Asset Management is also relatively very bullish on the stock, earmarking 4.29 percent of its 13F equity portfolio to IDXX.

Judging by the fact that IDEXX Laboratories, Inc. (NASDAQ:IDXX) has experienced bearish sentiment from the aggregate hedge fund industry, we can see that there was a specific group of money managers that slashed their full holdings by the end of the second quarter. Interestingly, Ken Griffin's Citadel Investment Group sold off the largest investment of the "upper crust" of funds watched by Insider Monkey, totaling an estimated $12.1 million in stock, and Jinghua Yan's TwinBeech Capital was right behind this move, as the fund cut about $5.5 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 10 funds by the end of the second quarter.

Let's also examine hedge fund activity in other stocks similar to IDEXX Laboratories, Inc. (NASDAQ:IDXX). We will take a look at General Dynamics Corporation (NYSE:GD), Takeda Pharmaceutical Company Limited (NYSE:TAK), Enterprise Products Partners L.P. (NYSE:EPD), Spotify Technology S.A. (NYSE:SPOT), Public Storage (NYSE:PSA), Metlife Inc (NYSE:MET), and Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX). This group of stocks' market values resemble IDXX's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GD,37,6235948,6 TAK,19,551214,0 EPD,28,246056,2 SPOT,48,3496814,2 PSA,27,1089757,1 MET,41,1056766,9 VRTX,60,2808847,-8 Average,37.1,2212200,1.7 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 37.1 hedge funds with bullish positions and the average amount invested in these stocks was $2212 million. That figure was $3576 million in IDXX's case. Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is the most popular stock in this table. On the other hand Takeda Pharmaceutical Company Limited (NYSE:TAK) is the least popular one with only 19 bullish hedge fund positions. IDEXX Laboratories, Inc. (NASDAQ:IDXX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for IDXX is 43.3. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. 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 21.8% in 2021 through October 11th and beat the market again by 4.4 percentage points. Unfortunately IDXX wasn't nearly as popular as these 5 stocks and hedge funds that were betting on IDXX were disappointed as the stock returned -3% since the end of June (through 10/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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