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Is TECH A Good Stock To Buy According To Hedge Funds?

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Reymerlyn Martin
·6 min read
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With the third-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 fourth quarter. One of these stocks was Bio-Techne Corporation (NASDAQ:TECH).

Is TECH a good stock to buy? Hedge funds were in a bullish mood. The number of bullish hedge fund bets increased by 3 recently. Bio-Techne Corporation (NASDAQ:TECH) was in 30 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 27. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that TECH isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

According to most shareholders, hedge funds are seen as worthless, old financial vehicles of the past. While there are over 8000 funds with their doors open today, Our experts choose to focus on the aristocrats of this group, approximately 850 funds. It is estimated that this group of investors administer most of the hedge fund industry's total capital, and by observing their top equity investments, Insider Monkey has formulated numerous investment strategies that have historically exceeded Mr. Market. Insider Monkey's flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .

Paul Marshall Marshall Wace
Paul Marshall Marshall Wace

Paul Marshall of Marshall Wace

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy to pick the best large-cap stocks to buy. 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 website. Now let's take a look at the key hedge fund action surrounding Bio-Techne Corporation (NASDAQ:TECH).

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

At the end of the third quarter, a total of 30 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from the previous quarter. On the other hand, there were a total of 21 hedge funds with a bullish position in TECH a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Bio-Techne Corporation (NASDAQ:TECH) was held by Renaissance Technologies, which reported holding $77.7 million worth of stock at the end of September. It was followed by Royce & Associates with a $52.4 million position. Other investors bullish on the company included Arrowstreet Capital, Alyeska Investment Group, and Millennium Management. In terms of the portfolio weights assigned to each position Sandler Capital Management allocated the biggest weight to Bio-Techne Corporation (NASDAQ:TECH), around 1% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, dishing out 0.57 percent of its 13F equity portfolio to TECH.

As aggregate interest increased, some big names have jumped into Bio-Techne Corporation (NASDAQ:TECH) headfirst. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, established the biggest position in Bio-Techne Corporation (NASDAQ:TECH). Marshall Wace LLP had $6.6 million invested in the company at the end of the quarter. John Overdeck and David Siegel's Two Sigma Advisors also made a $1.7 million investment in the stock during the quarter. The other funds with brand new TECH positions are Paul Tudor Jones's Tudor Investment Corp, Ed Bosek's BeaconLight Capital, and Alec Litowitz and Ross Laser's Magnetar Capital.

Let's check out hedge fund activity in other stocks similar to Bio-Techne Corporation (NASDAQ:TECH). We will take a look at Albemarle Corporation (NYSE:ALB), Ally Financial Inc (NYSE:ALLY), Nuance Communications Inc. (NASDAQ:NUAN), Shaw Communications Inc (NYSE:SJR), Huntington Bancshares Incorporated (NASDAQ:HBAN), Medical Properties Trust, Inc. (NYSE:MPW), and Elastic N.V. (NYSE:ESTC). This group of stocks' market caps resemble TECH's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ALB,27,112814,2 ALLY,53,1927912,-1 NUAN,45,3050684,1 SJR,13,111942,0 HBAN,27,121358,-3 MPW,21,286844,4 ESTC,36,1457200,-7 Average,31.7,1009822,-0.6 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 31.7 hedge funds with bullish positions and the average amount invested in these stocks was $1010 million. That figure was $259 million in TECH's case. Ally Financial Inc (NYSE:ALLY) is the most popular stock in this table. On the other hand Shaw Communications Inc (NYSE:SJR) is the least popular one with only 13 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 59.3. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 33.3% in 2020 through December 18th and still beat the market by 16.4 percentage points. A small number of hedge funds were also right about betting on TECH as the stock returned 29.4% since the end of the third quarter (through 12/18) and outperformed the market by an even larger margin.

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

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