We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do. However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, let’s examine the smart money sentiment towards Bio-Techne Corporation (NASDAQ:TECH) and determine whether hedge funds skillfully traded this stock.
Is Bio-Techne Corporation (NASDAQ:TECH) going to take off soon? Investors who are in the know were becoming hopeful. The number of bullish hedge fund bets advanced by 8 recently. Bio-Techne Corporation (NASDAQ:TECH) was in 33 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 30. 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). There were 25 hedge funds in our database with TECH positions at the end of the second quarter.
Chuck Royce of Royce & Associates
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. With all of this in mind let’s take a glance at the recent hedge fund action surrounding Bio-Techne Corporation (NASDAQ:TECH).
Do Hedge Funds Think TECH Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 33 of the hedge funds tracked by Insider Monkey were long this stock, a change of 32% from the previous quarter. By comparison, 30 hedge funds held shares or bullish call options in TECH a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Marshall Wace LLP, managed by Paul Marshall and Ian Wace, holds the biggest position in Bio-Techne Corporation (NASDAQ:TECH). Marshall Wace LLP has a $111.8 million position in the stock, comprising 0.5% of its 13F portfolio. The second most bullish fund manager is Israel Englander of Millennium Management, with a $46.3 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining members of the smart money with similar optimism include Charles Montanaro’s Montanaro Asset Management, Chuck Royce’s Royce & Associates and Andrew Sandler’s Sandler Capital Management. In terms of the portfolio weights assigned to each position Montanaro Asset Management allocated the biggest weight to Bio-Techne Corporation (NASDAQ:TECH), around 5.46% of its 13F portfolio. Sandler Capital Management is also relatively very bullish on the stock, earmarking 2.95 percent of its 13F equity portfolio to TECH.
Consequently, key hedge funds have been driving this bullishness. Adage Capital Management, managed by Phill Gross and Robert Atchinson, assembled the largest position in Bio-Techne Corporation (NASDAQ:TECH). Adage Capital Management had $20.3 million invested in the company at the end of the quarter. Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management also made a $8.5 million investment in the stock during the quarter. The other funds with brand new TECH positions are Krishen Sud’s Sivik Global Healthcare, Roberto Mignone’s Bridger Management, and John Overdeck and David Siegel’s Two Sigma Advisors.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Bio-Techne Corporation (NASDAQ:TECH) but similarly valued. These stocks are Raymond James Financial, Inc. (NYSE:RJF), Burlington Stores Inc (NYSE:BURL), Restaurant Brands International Inc (NYSE:QSR), Avangrid, Inc. (NYSE:AGR), Tradeweb Markets Inc. (NASDAQ:TW), Tyler Technologies, Inc. (NYSE:TYL), and Hologic, Inc. (NASDAQ:HOLX). This group of stocks’ market values match TECH’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RJF | 32 | 767984 | 3 |
| BURL | 45 | 1835947 | 2 |
| QSR | 22 | 1873877 | 0 |
| AGR | 9 | 37232 | -3 |
| TW | 22 | 135429 | 7 |
| TYL | 30 | 772769 | -3 |
| HOLX | 39 | 716983 | -2 |
| Average | 28.4 | 877174 | 0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.4 hedge funds with bullish positions and the average amount invested in these stocks was $877 million. That figure was $432 million in TECH’s case. Burlington Stores Inc (NYSE:BURL) is the most popular stock in this table. On the other hand Avangrid, Inc. (NYSE:AGR) is the least popular one with only 9 bullish hedge fund positions. Bio-Techne Corporation (NASDAQ:TECH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TECH is 73.3. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately, TECH wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on TECH were disappointed as the stock returned -22.3% since the end of September (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.
Follow Bio-Techne Corp (NASDAQ:TECH)
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Disclosure: None. This article was originally published at Insider Monkey.
