We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the fourth quarter, which unveil their equity positions as of December 31. 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 China Biologic Products Inc (NASDAQ:CBPO).
China Biologic Products Inc (NASDAQ:CBPO) shareholders have witnessed an increase in enthusiasm from smart money recently. Our calculations also showed that CBPO isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
At the moment there are several gauges stock traders put to use to grade stocks. A pair of the most innovative gauges are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the top hedge fund managers can outperform the market by a healthy margin (see the details here).
Lei Zhang of Hillhouse Capital Management
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like this one. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s review the new hedge fund action surrounding China Biologic Products Inc (NASDAQ:CBPO).
What does smart money think about China Biologic Products Inc (NASDAQ:CBPO)?
At the end of the fourth quarter, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from the third quarter of 2019. On the other hand, there were a total of 7 hedge funds with a bullish position in CBPO a year ago. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
Among these funds, Hillhouse Capital Management held the most valuable stake in China Biologic Products Inc (NASDAQ:CBPO), which was worth $320.2 million at the end of the third quarter. On the second spot was York Capital Management which amassed $128.3 million worth of shares. Maso Capital, GLG Partners, and Pentwater Capital Management 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 Maso Capital allocated the biggest weight to China Biologic Products Inc (NASDAQ:CBPO), around 20.19% of its 13F portfolio. York Capital Management is also relatively very bullish on the stock, dishing out 7.4 percent of its 13F equity portfolio to CBPO.
Consequently, key hedge funds have jumped into China Biologic Products Inc (NASDAQ:CBPO) headfirst. Caxton Associates LP, managed by Bruce Kovner, created the biggest position in China Biologic Products Inc (NASDAQ:CBPO). Caxton Associates LP had $0.4 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $0.3 million position during the quarter. The other funds with new positions in the stock are Donald Sussman’s Paloma Partners and Simon Davies’s Sand Grove Capital Partners.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as China Biologic Products Inc (NASDAQ:CBPO) but similarly valued. These stocks are Healthcare Realty Trust Inc (NYSE:HR), Pure Storage, Inc. (NYSE:PSTG), Enstar Group Ltd. (NASDAQ:ESGR), and GrubHub Inc (NYSE:GRUB). This group of stocks’ market caps are similar to CBPO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HR | 12 | 51401 | -1 |
| PSTG | 29 | 469978 | -6 |
| ESGR | 13 | 440083 | 0 |
| GRUB | 33 | 527926 | 8 |
| Average | 21.75 | 372347 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.75 hedge funds with bullish positions and the average amount invested in these stocks was $372 million. That figure was $562 million in CBPO’s case. GrubHub Inc (NYSE:GRUB) is the most popular stock in this table. On the other hand Healthcare Realty Trust Inc (NYSE:HR) is the least popular one with only 12 bullish hedge fund positions. China Biologic Products Inc (NASDAQ:CBPO) is not the least popular stock in this group but hedge fund interest is still below average. 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 10.1 percentage points. These stocks lost 17.4% in 2020 through March 25th but still beat the market by 5.5 percentage points. A small number of hedge funds were also right about betting on CBPO as the stock returned -6% during the same time period and outperformed the market by an even larger margin.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
