Does Neogen Corporation (NASDAQ:NEOG) represent a good buying opportunity at the moment? Let’s briefly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail inconceivably on some occasions, but their stock picks have been generating superior risk-adjusted returns on average over the years.
Neogen Corporation (NASDAQ:NEOG) has experienced an increase in activity from the world’s largest hedge funds lately. Our calculations also showed that neog isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We’re going to review the new hedge fund action regarding Neogen Corporation (NASDAQ:NEOG).
What have hedge funds been doing with Neogen Corporation (NASDAQ:NEOG)?
Heading into the fourth quarter of 2018, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 20% from the second quarter of 2018. On the other hand, there were a total of 10 hedge funds with a bullish position in NEOG at the beginning of this year. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Arrowstreet Capital held the most valuable stake in Neogen Corporation (NASDAQ:NEOG), which was worth $19.2 million at the end of the third quarter. On the second spot was GLG Partners which amassed $10.2 million worth of shares. Moreover, D E Shaw, Casdin Capital, and Citadel Investment Group were also bullish on Neogen Corporation (NASDAQ:NEOG), allocating a large percentage of their portfolios to this stock.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Millennium Management, managed by Israel Englander, established the most outsized position in Neogen Corporation (NASDAQ:NEOG). Millennium Management had $0.8 million invested in the company at the end of the quarter. Alec Litowitz and Ross Laser’s Magnetar Capital also made a $0.2 million investment in the stock during the quarter.
Let’s also examine hedge fund activity in other stocks similar to Neogen Corporation (NASDAQ:NEOG). We will take a look at Allegheny Technologies Incorporated (NYSE:ATI), Wolverine World Wide, Inc. (NYSE:WWW), Nexstar Media Group, Inc. (NASDAQ:NXST), and RBC Bearings Incorporated (NASDAQ:ROLL). This group of stocks’ market caps match NEOG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ATI | 27 | 347606 | -1 |
| WWW | 13 | 124374 | -1 |
| NXST | 37 | 894057 | 6 |
| ROLL | 7 | 60213 | -2 |
| Average | 21 | 356563 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $357 million. That figure was $51 million in NEOG’s case. Nexstar Media Group, Inc. (NASDAQ:NXST) is the most popular stock in this table. On the other hand RBC Bearings Incorporated (NASDAQ:ROLL) is the least popular one with only 7 bullish hedge fund positions. Neogen Corporation (NASDAQ:NEOG) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard NXST might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
