Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
BioScrip Inc. (NASDAQ:BIOS) has seen a decrease in enthusiasm from smart money of late. BIOS was in 20 hedge funds’ portfolios at the end of the third quarter of 2016. There were 23 hedge funds in our database with BIOS holdings at the end of the previous quarter. At the end of this article we will also compare BIOS to other stocks including Supreme Industries, Inc. (NYSEAMEX:STS), Renewable Energy Group Inc (NASDAQ:REGI), and Lumos Networks Corp (NASDAQ:LMOS) to get a better sense of its popularity.
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How are hedge funds trading BioScrip Inc. (NASDAQ:BIOS)?
Heading into the fourth quarter of 2016, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, down by 13% from the second quarter of 2016. By comparison, 13 hedge funds held shares or bullish call options in BIOS heading into this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Stephen DuBois’ Camber Capital Management has the most valuable position in BioScrip Inc. (NASDAQ:BIOS), worth close to $29.4 million, corresponding to 1.3% of its total 13F portfolio. The second largest stake is held by North Tide Capital, led by Conan Laughlin, which reported a $24.6 million position; the fund has 2.7% of its 13F portfolio invested in the stock. Some other professional money managers that hold long positions comprise Christopher Shackelton and Adam Gray’s Coliseum Capital, Ric Dillon’s Diamond Hill Capital and Philip Hempleman’s Ardsley Partners. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Seeing as BioScrip Inc. (NASDAQ:BIOS) has sustained bearish sentiment from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of fund managers that slashed their positions entirely heading into Q4. It’s worth mentioning that Anand Parekh’s Alyeska Investment Group cashed in the largest investment of the “upper crust” of funds followed by Insider Monkey, totaling close to $3.3 million in stock. Andrew Feldstein and Stephen Siderow’s fund, Blue Mountain Capital, also said goodbye to its stock, about $3 million worth.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as BioScrip Inc. (NASDAQ:BIOS) but similarly valued. These stocks are Supreme Industries, Inc. (NYSEAMEX:STS), Renewable Energy Group Inc (NASDAQ:REGI), Lumos Networks Corp (NASDAQ:LMOS), and Acacia Research Corporation (NASDAQ:ACTG). This group of stocks’ market values resemble BIOS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| STS | 9 | 24816 | 3 |
| REGI | 15 | 53777 | -2 |
| LMOS | 14 | 53181 | 3 |
| ACTG | 13 | 56058 | 2 |
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $47 million. That figure was $154 million in BIOS’s case. Renewable Energy Group Inc (NASDAQ:REGI) is the most popular stock in this table. On the other hand Supreme Industries, Inc. (NYSEAMEX:STS) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks BioScrip Inc. (NASDAQ:BIOS) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
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