Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.
BioScrip Inc. (NASDAQ:BIOS) was in 18 hedge funds’ portfolios at the end of September. BIOS shareholders have witnessed an increase in activity from the world’s largest hedge funds lately. There were 17 hedge funds in our database with BIOS holdings at the end of the previous quarter. Our calculations also showed that bios isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s take a gander at the new hedge fund action encompassing BioScrip Inc. (NASDAQ:BIOS).
How are hedge funds trading BioScrip Inc. (NASDAQ:BIOS)?
At Q3’s end, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from the second quarter of 2018. By comparison, 18 hedge funds held shares or bullish call options in BIOS heading into this year. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jeffrey Bersh and Michael Wartell’s Venor Capital Management has the biggest position in BioScrip Inc. (NASDAQ:BIOS), worth close to $44.9 million, comprising 20.7% of its total 13F portfolio. The second largest stake is held by D E Shaw, led by D. E. Shaw, holding a $12.9 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions include Ric Dillon’s Diamond Hill Capital, Israel Englander’s Millennium Management and Chuck Royce’s Royce & Associates.
Now, some big names were breaking ground themselves. GLG Partners, managed by Noam Gottesman, created the most valuable position in BioScrip Inc. (NASDAQ:BIOS). GLG Partners had $0.1 million invested in the company at the end of the quarter. Michael Platt and William Reeves’s BlueCrest Capital Mgmt. also initiated a $0 million position during the quarter. The only other fund with a new position in the stock is Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s check out hedge fund activity in other stocks similar to BioScrip Inc. (NASDAQ:BIOS). We will take a look at Capital City Bank Group, Inc. (NASDAQ:CCBG), iRadimed Corporation (NASDAQ:IRMD), Macatawa Bank Corporation (NASDAQ:MCBC), and Rimini Street, Inc. (NASDAQ:RMNI). This group of stocks’ market caps are closest to BIOS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CCBG | 3 | 6120 | 0 |
| IRMD | 9 | 16494 | 6 |
| MCBC | 5 | 24135 | 1 |
| RMNI | 3 | 7586 | 2 |
| Average | 5 | 13584 | 2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $107 million in BIOS’s case. iRadimed Corporation (NASDAQ:IRMD) is the most popular stock in this table. On the other hand Capital City Bank Group, Inc. (NASDAQ:CCBG) is the least popular one with only 3 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.
Disclosure: None. This article was originally published at Insider Monkey.
