Based on the fact that hedge funds have collectively under-performed the market for several years, it would be easy to assume that their stock picks simply aren’t very good. However, our research shows this not to be the case. In fact, when it comes to their very top picks collectively, they show a strong ability to pick winning stocks. This year hedge funds’ top 20 stock picks easily bested the broader market, at 37.4% compared to 27.5%, despite there being a few duds in there like Berkshire Hathaway (even their collective wisdom isn’t perfect). The results show that there is plenty of merit to imitating the collective wisdom of top investors.
Qiagen NV (NYSE:QGEN) was in 22 hedge funds’ portfolios at the end of September. QGEN investors should be aware of a decrease in enthusiasm from smart money recently. There were 25 hedge funds in our database with QGEN holdings at the end of the previous quarter. Our calculations also showed that QGEN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
According to most investors, hedge funds are viewed as underperforming, old investment tools of years past. While there are greater than 8000 funds in operation at the moment, Our researchers look at the elite of this group, about 750 funds. These hedge fund managers orchestrate the majority of the hedge fund industry’s total capital, and by paying attention to their highest performing investments, Insider Monkey has revealed numerous investment strategies that have historically outpaced Mr. Market. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points a year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Bruce Kovner of Caxton Associates LP
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. Let’s review the key hedge fund action encompassing Qiagen NV (NYSE:QGEN).
What does smart money think about Qiagen NV (NYSE:QGEN)?
At the end of the third quarter, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of -12% from one quarter earlier. On the other hand, there were a total of 24 hedge funds with a bullish position in QGEN a year ago. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
More specifically, D E Shaw was the largest shareholder of Qiagen NV (NYSE:QGEN), with a stake worth $75.8 million reported as of the end of September. Trailing D E Shaw was AQR Capital Management, which amassed a stake valued at $61 million. Marshall Wace, Healthcor Management, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Opus Point Partners Management allocated the biggest weight to Qiagen NV (NYSE:QGEN), around 1.72% of its 13F portfolio. Healthcor Management is also relatively very bullish on the stock, dishing out 0.77 percent of its 13F equity portfolio to QGEN.
Seeing as Qiagen NV (NYSE:QGEN) has witnessed bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of funds that elected to cut their positions entirely last quarter. Intriguingly, Brian Ashford-Russell and Tim Woolley’s Polar Capital cut the largest stake of all the hedgies watched by Insider Monkey, comprising about $6.7 million in stock, and Benjamin A. Smith’s Laurion Capital Management was right behind this move, as the fund dumped about $2.8 million worth. These moves are interesting, as total hedge fund interest fell by 3 funds last quarter.
Let’s now review hedge fund activity in other stocks similar to Qiagen NV (NYSE:QGEN). These stocks are Tapestry, Inc. (NYSE:TPR), James Hardie Industries plc (NYSE:JHX), BRF S.A. (NYSE:BRFS), and Bio-Techne Corporation (NASDAQ:TECH). All of these stocks’ market caps match QGEN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TPR | 24 | 385305 | -8 |
| JHX | 2 | 6880 | 0 |
| BRFS | 14 | 116226 | 1 |
| TECH | 19 | 317814 | -5 |
| Average | 14.75 | 206556 | -3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.75 hedge funds with bullish positions and the average amount invested in these stocks was $207 million. That figure was $277 million in QGEN’s case. Tapestry, Inc. (NYSE:TPR) is the most popular stock in this table. On the other hand James Hardie Industries plc (NYSE:JHX) is the least popular one with only 2 bullish hedge fund positions. Qiagen NV (NYSE:QGEN) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on QGEN as the stock returned 29.8% during the fourth quarter (through the end of November) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
