Hedge Funds Have Never Been This Bullish On IDEXX Laboratories, Inc. (IDXX)

How do you pick the next stock to invest in? One way would be to spend days of research browsing through thousands of publicly traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of capital and have to conduct due diligence while choosing their next pick. They don’t always get it right, but, on average, their stock picks historically generated strong returns after adjusting for known risk factors. With this in mind, let’s take a look at the recent hedge fund activity surrounding IDEXX Laboratories, Inc. (NASDAQ:IDXX).

Is IDEXX Laboratories, Inc. (NASDAQ:IDXX) a worthy investment now? The smart money was becoming hopeful. The number of bullish hedge fund bets improved by 3 recently. IDEXX Laboratories, Inc. (NASDAQ:IDXX) was in 49 hedge funds’ portfolios at the end of March. The all time high for this statistic was previously 46. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that IDXX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 46 hedge funds in our database with IDXX holdings at the end of December.

According to most traders, hedge funds are perceived as worthless, outdated investment vehicles of years past. While there are greater than 8000 funds with their doors open today, Our experts choose to focus on the elite of this club, around 850 funds. It is estimated that this group of investors oversee bulk of the smart money’s total asset base, and by monitoring their first-class picks, Insider Monkey has deciphered many investment strategies that have historically outrun the market. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Kris Jenner of Rock Springs Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation, which is why we are checking out this inflation play. We go through lists like 10 best gold stocks to buy to identify promising stocks. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to take a glance at the fresh hedge fund action encompassing IDEXX Laboratories, Inc. (NASDAQ:IDXX).

Do Hedge Funds Think IDXX Is A Good Stock To Buy Now?

At first quarter’s end, a total of 49 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 7% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in IDXX over the last 23 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Fundsmith LLP was the largest shareholder of IDEXX Laboratories, Inc. (NASDAQ:IDXX), with a stake worth $2065.2 million reported as of the end of March. Trailing Fundsmith LLP was Marshall Wace LLP, which amassed a stake valued at $125.2 million. Echo Street Capital Management, Rock Springs Capital Management, and Select Equity 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 Fundsmith LLP allocated the biggest weight to IDEXX Laboratories, Inc. (NASDAQ:IDXX), around 6.57% of its 13F portfolio. Montanaro Asset Management is also relatively very bullish on the stock, designating 3.89 percent of its 13F equity portfolio to IDXX.

As industrywide interest jumped, specific money managers were leading the bulls’ herd. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, initiated the most valuable position in IDEXX Laboratories, Inc. (NASDAQ:IDXX). Marshall Wace LLP had $125.2 million invested in the company at the end of the quarter. Kevin Molloy’s Iron Triangle Partners also made a $17.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Arthur B Cohen and Joseph Healey’s Healthcor Management LP, John Overdeck and David Siegel’s Two Sigma Advisors, and Donald Sussman’s Paloma Partners.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as IDEXX Laboratories, Inc. (NASDAQ:IDXX) but similarly valued. We will take a look at Microchip Technology Incorporated (NASDAQ:MCHP), Manulife Financial Corporation (NYSE:MFC), eBay Inc (NASDAQ:EBAY), L3Harris Technologies, Inc. (NYSE:LHX), The Bank of New York Mellon Corporation (NYSE:BK), Cognizant Technology Solutions Corp (NASDAQ:CTSH), and DuPont de Nemours Inc (NYSE:DD). This group of stocks’ market values resemble IDXX’s market value.

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As you can see these stocks had an average of 40.3 hedge funds with bullish positions and the average amount invested in these stocks was $2306 million. That figure was $2852 million in IDXX’s case. eBay Inc (NASDAQ:EBAY) is the most popular stock in this table. On the other hand Manulife Financial Corporation (NYSE:MFC) is the least popular one with only 17 bullish hedge fund positions. IDEXX Laboratories, Inc. (NASDAQ:IDXX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for IDXX is 85.1. 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. 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 17.4% in 2021 through June 18th and still beat the market by 6.1 percentage points. Hedge funds were also right about betting on IDXX as the stock returned 22.8% since the end of Q1 (through 6/18) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.