Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in Harvard Bioscience, Inc. (NASDAQ:HBIO)? The smart money sentiment can provide an answer to this question.
Harvard Bioscience, Inc. (NASDAQ:HBIO) investors should be aware of an increase in enthusiasm from smart money in recent months. HBIO was in 13 hedge funds’ portfolios at the end of September. There were 11 hedge funds in our database with HBIO holdings at the end of the previous quarter. Our calculations also showed that HBIO 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.
At the moment there are dozens of tools shareholders use to evaluate publicly traded companies. A duo of the less utilized tools are hedge fund and insider trading activity. We have shown that, historically, those who follow the top picks of the best hedge fund managers can outpace their index-focused peers by a very impressive amount (see the details here).
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s analyze the key hedge fund action regarding Harvard Bioscience, Inc. (NASDAQ:HBIO).
How have hedgies been trading Harvard Bioscience, Inc. (NASDAQ:HBIO)?
Heading into the fourth quarter of 2019, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of 18% from the second quarter of 2019. The graph below displays the number of hedge funds with bullish position in HBIO over the last 17 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
The largest stake in Harvard Bioscience, Inc. (NASDAQ:HBIO) was held by Engine Capital, which reported holding $10.5 million worth of stock at the end of September. It was followed by Royce & Associates with a $5.7 million position. Other investors bullish on the company included Fondren Management, Harvey Partners, and Millennium Management. In terms of the portfolio weights assigned to each position Engine Capital allocated the biggest weight to Harvard Bioscience, Inc. (NASDAQ:HBIO), around 4.92% of its 13F portfolio. Fondren Management is also relatively very bullish on the stock, designating 2.21 percent of its 13F equity portfolio to HBIO.
As aggregate interest increased, key money managers have jumped into Harvard Bioscience, Inc. (NASDAQ:HBIO) headfirst. Harvey Partners, managed by Jeffrey Moskowitz, created the most outsized position in Harvard Bioscience, Inc. (NASDAQ:HBIO). Harvey Partners had $2.3 million invested in the company at the end of the quarter. David Harding’s Winton Capital Management also made a $0.1 million investment in the stock during the quarter. The other funds with brand new HBIO positions are Andre F. Perold’s HighVista Strategies and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Let’s check out hedge fund activity in other stocks similar to Harvard Bioscience, Inc. (NASDAQ:HBIO). We will take a look at Aptose Biosciences Inc (NASDAQ:APTO), Limestone Bancorp, Inc. (NASDAQ:LMST), Alcentra Capital Corp. (NASDAQ:ABDC), and Park City Group, Inc. (NYSEAMEX:PCYG). This group of stocks’ market valuations are closest to HBIO’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| APTO | 7 | 19612 | 1 |
| LMST | 1 | 4646 | 0 |
| ABDC | 3 | 2517 | 0 |
| PCYG | 3 | 569 | -1 |
| Average | 3.5 | 6836 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.5 hedge funds with bullish positions and the average amount invested in these stocks was $7 million. That figure was $27 million in HBIO’s case. Aptose Biosciences Inc (NASDAQ:APTO) is the most popular stock in this table. On the other hand Limestone Bancorp, Inc. (NASDAQ:LMST) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Harvard Bioscience, Inc. (NASDAQ:HBIO) is more popular among hedge funds. 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. Unfortunately HBIO wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on HBIO were disappointed as the stock returned -5.8% during the first two months of the fourth quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
