Where Do Hedge Funds Stand On BIO-key International, Inc. (BKYI)?
The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. 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 BIO-key International, Inc. (NASDAQ:BKYI).
Hedge fund interest in BIO-key International, Inc. (NASDAQ:BKYI) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that BKYI isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare BKYI to other stocks including Wilhelmina International, Inc. (NASDAQ:WHLM), Provectus Biopharmaceuticals Inc (NYSE:PVCT), and Immuron Limited (NASDAQ:IMRN) to get a better sense of its popularity.
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 S&P 500 ETFs by 115 percentage points since March 2017 (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.
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At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $30 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. 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 let's analyze the fresh hedge fund action surrounding BIO-key International, Inc. (NASDAQ:BKYI).
Do Hedge Funds Think BKYI Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 0 hedge funds with a bullish position in BKYI a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in BIO-key International, Inc. (NASDAQ:BKYI) was held by Citadel Investment Group, which reported holding $0.6 million worth of stock at the end of December. It was followed by Sabby Capital with a $0.1 million position. The only other hedge fund that is bullish on the company was Citadel Investment Group.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Renaissance Technologies. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Citadel Investment Group).
Let's also examine hedge fund activity in other stocks similar to BIO-key International, Inc. (NASDAQ:BKYI). These stocks are Wilhelmina International, Inc. (NASDAQ:WHLM), Provectus Biopharmaceuticals Inc (NYSE:PVCT), Immuron Limited (NASDAQ:IMRN), Iconix Brand Group Inc (NASDAQ:ICON), Abraxas Petroleum Corp. (NASDAQ:AXAS), Muscle Maker, Inc. (NASDAQ:GRIL), and Camber Energy, Inc. (NYSE:CEI). This group of stocks' market values are closest to BKYI's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position WHLM,1,91,1 PVCT,1,1,1 IMRN,2,1148,0 ICON,4,3501,-1 AXAS,3,447,-1 GRIL,2,374,1 CEI,1,176,-1 Average,2,820,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 2 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $0 million in BKYI's case. Iconix Brand Group Inc (NASDAQ:ICON) is the most popular stock in this table. On the other hand Wilhelmina International, Inc. (NASDAQ:WHLM) is the least popular one with only 1 bullish hedge fund positions. BIO-key International, Inc. (NASDAQ:BKYI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BKYI is 68.3. 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 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 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. Hedge funds were also right about betting on BKYI as the stock returned 17.5% since the end of Q1 (through 6/11) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
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