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 first quarter. One of these stocks was Meridian Bioscience, Inc. (NASDAQ:VIVO).
Meridian Bioscience, Inc. (NASDAQ:VIVO) was in 16 hedge funds' portfolios at the end of the first quarter of 2019. VIVO investors should be aware of a decrease in support from the world's most elite money managers of late. There were 18 hedge funds in our database with VIVO positions at the end of the previous quarter. Our calculations also showed that vivo isn't among the 30 most popular stocks among hedge funds.
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. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
We're going to go over the key hedge fund action surrounding Meridian Bioscience, Inc. (NASDAQ:VIVO).
What have hedge funds been doing with Meridian Bioscience, Inc. (NASDAQ:VIVO)?
At Q1's end, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of -11% from one quarter earlier. By comparison, 16 hedge funds held shares or bullish call options in VIVO a year ago. With hedge funds' capital changing hands, there exists a select group of key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Jim Simons's Renaissance Technologies has the number one position in Meridian Bioscience, Inc. (NASDAQ:VIVO), worth close to $52.9 million, accounting for less than 0.1%% of its total 13F portfolio. The second largest stake is held by D. E. Shaw of D E Shaw, with a $6.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish comprise Noam Gottesman's GLG Partners, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital and Ken Griffin's Citadel Investment Group.
Judging by the fact that Meridian Bioscience, Inc. (NASDAQ:VIVO) has witnessed declining sentiment from the aggregate hedge fund industry, logic holds that there were a few hedgies who sold off their entire stakes heading into Q3. Intriguingly, David Harding's Winton Capital Management sold off the biggest investment of the 700 funds followed by Insider Monkey, worth about $3.7 million in stock, and Minhua Zhang's Weld Capital Management was right behind this move, as the fund sold off about $0.6 million worth. These moves are interesting, as total hedge fund interest was cut by 2 funds heading into Q3.
Let's also examine hedge fund activity in other stocks similar to Meridian Bioscience, Inc. (NASDAQ:VIVO). These stocks are Wabash National Corporation (NYSE:WNC), NV5 Global, Inc. (NASDAQ:NVEE), Mammoth Energy Services, Inc. (NASDAQ:TUSK), and NanoString Technologies Inc (NASDAQ:NSTG). All of these stocks' market caps are similar to VIVO's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position WNC,16,67949,-4 NVEE,10,25194,-3 TUSK,17,389043,0 NSTG,22,143670,7 Average,16.25,156464,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.25 hedge funds with bullish positions and the average amount invested in these stocks was $156 million. That figure was $84 million in VIVO's case. NanoString Technologies Inc (NASDAQ:NSTG) is the most popular stock in this table. On the other hand NV5 Global, Inc. (NASDAQ:NVEE) is the least popular one with only 10 bullish hedge fund positions. Meridian Bioscience, Inc. (NASDAQ:VIVO) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately VIVO wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); VIVO investors were disappointed as the stock returned -33.3% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
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