How do we determine whether Qiagen NV (NYSE:QGEN) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
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' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were 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'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to review the new hedge fund action surrounding Qiagen NV (NYSE:QGEN).
How are hedge funds trading Qiagen NV (NYSE:QGEN)?
At the end of the first quarter, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of 10% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards QGEN over the last 15 quarters. With the smart money's capital changing hands, there exists an "upper tier" of notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, AQR Capital Management, managed by Cliff Asness, holds the largest position in Qiagen NV (NYSE:QGEN). AQR Capital Management has a $105.2 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by D E Shaw, led by D. E. Shaw, holding a $69.4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that are bullish comprise Doug Silverman and Alexander Klabin's Senator Investment Group, Andrew Sandler's Sandler Capital Management and John Overdeck and David Siegel's Two Sigma Advisors.
As aggregate interest increased, key hedge funds have been driving this bullishness. Senator Investment Group, managed by Doug Silverman and Alexander Klabin, initiated the largest position in Qiagen NV (NYSE:QGEN). Senator Investment Group had $40.7 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace's Marshall Wace LLP also made a $16.5 million investment in the stock during the quarter. The following funds were also among the new QGEN investors: Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, Jeffrey Talpins's Element Capital Management, and Michael Platt and William Reeves's BlueCrest Capital Mgmt..
Let's now take a look at hedge fund activity in other stocks similar to Qiagen NV (NYSE:QGEN). We will take a look at Aurora Cannabis Inc. (NYSE:ACB), EPAM Systems Inc (NYSE:EPAM), Bio-Rad Laboratories, Inc. (NYSE:BIO), and Mohawk Industries, Inc. (NYSE:MHK). This group of stocks' market caps resemble QGEN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ACB,11,115927,2 EPAM,21,72308,-1 BIO,37,888698,2 MHK,34,1887240,2 Average,25.75,741043,1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.75 hedge funds with bullish positions and the average amount invested in these stocks was $741 million. That figure was $376 million in QGEN's case. Bio-Rad Laboratories, Inc. (NYSE:BIO) is the most popular stock in this table. On the other hand Aurora Cannabis Inc. (NYSE:ACB) is the least popular one with only 11 bullish hedge fund positions. Qiagen NV (NYSE:QGEN) 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 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately QGEN wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); QGEN investors were disappointed as the stock returned -6.9% 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.