Is IDEXX Laboratories, Inc. (IDXX) Going to Burn These Hedge Funds?

IDEXX Laboratories, Inc. (NASDAQ:IDXX) was in 11 hedge funds’ portfolio at the end of the first quarter of 2013. IDXX investors should be aware of a decrease in hedge fund sentiment of late. There were 12 hedge funds in our database with IDXX positions at the end of the previous quarter.

According to most shareholders, hedge funds are perceived as worthless, outdated investment tools of yesteryear. While there are more than 8000 funds in operation at the moment, we at Insider Monkey choose to focus on the upper echelon of this club, around 450 funds. It is estimated that this group controls most of the hedge fund industry’s total capital, and by tracking their top stock picks, we have uncovered a number of investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Equally as beneficial, positive insider trading activity is another way to break down the marketplace. There are a number of stimuli for a bullish insider to downsize shares of his or her company, but only one, very simple reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the valuable potential of this method if piggybackers know where to look (learn more here).

Consequently, we’re going to take a gander at the latest action surrounding IDEXX Laboratories, Inc. (NASDAQ:IDXX).

How are hedge funds trading IDEXX Laboratories, Inc. (NASDAQ:IDXX)?

At the end of the first quarter, a total of 11 of the hedge funds we track were long in this stock, a change of -8% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their stakes substantially.

When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the largest position in IDEXX Laboratories, Inc. (NASDAQ:IDXX). Royce & Associates has a $181.1 million position in the stock, comprising 0.6% of its 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $32.2 million position; 0.1% of its 13F portfolio is allocated to the company. Other peers that hold long positions include Ken Griffin’s Citadel Investment Group, Israel Englander’s Millennium Management and SAC Subsidiary’s CR Intrinsic Investors.

Due to the fact that IDEXX Laboratories, Inc. (NASDAQ:IDXX) has faced a declination in interest from hedge fund managers, logic holds that there were a few money managers who were dropping their positions entirely in Q1. Interestingly, Mike Vranos’s Ellington cut the biggest position of the “upper crust” of funds we track, comprising an estimated $1 million in stock.. David Harding’s fund, Winton Capital Management, also sold off its stock, about $0.3 million worth. These transactions are interesting, as total hedge fund interest was cut by 1 funds in Q1.

Insider trading activity in IDEXX Laboratories, Inc. (NASDAQ:IDXX)

Insider trading activity, especially when it’s bullish, is particularly usable when the company we’re looking at has seen transactions within the past half-year. Over the latest six-month time frame, IDEXX Laboratories, Inc. (NASDAQ:IDXX) has experienced zero unique insiders buying, and 8 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to IDEXX Laboratories, Inc. (NASDAQ:IDXX). These stocks are Synta Pharmaceuticals Corp. (NASDAQ:SNTA), Quidel Corporation (NASDAQ:QDEL), Meridian Bioscience, Inc. (NASDAQ:VIVO), Abaxis Inc (NASDAQ:ABAX), and Neogen Corporation (NASDAQ:NEOG). This group of stocks are the members of the diagnostic substances industry and their market caps match IDXX’s market cap.

With the returns exhibited by Insider Monkey’s studies, everyday investors must always pay attention to hedge fund and insider trading activity, and IDEXX Laboratories, Inc. (NASDAQ:IDXX) applies perfectly to this mantra.

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