Hedge Funds Are Unsure of OraSure Technologies, Inc. (OSUR)

It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 7.6% over the 12-month period ending November 21, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored mid-cap stocks by the best performing hedge funds monitored by Insider Monkey generated a return of 18% over the same time span. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in OraSure Technologies, Inc. (NASDAQ:OSUR).

OraSure Technologies, Inc. (NASDAQ:OSUR) has seen a decrease in enthusiasm from smart money lately, with 2 fewer hedgies owning shares of the company. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as U.S. Lime & Minerals Inc. (NASDAQ:USLM), Adamas Pharmaceuticals Inc (NASDAQ:ADMS), and Aerohive Networks Inc (NYSE:HIVE) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

How are hedge funds trading OraSure Technologies, Inc. (NASDAQ:OSUR)?

At Q3’s end, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 9% drop from one quarter earlier. Ownership has remained in a narrow range throughout the last year, trending down slightly. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, managed by Jim Simons, holds the largest position in OraSure Technologies, Inc. (NASDAQ:OSUR). Renaissance Technologies has a $31.7 million position in the stock. The second largest stake is held by AQR Capital Management, managed by Cliff Asness, which holds a $8.9 million position. Other members of the smart money with similar optimism comprise D E Shaw, Ken Fisher’s Fisher Asset Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Because OraSure Technologies, Inc. (NASDAQ:OSUR) has experienced falling interest from hedge fund managers, logic holds that there were a few hedge funds that decided to sell off their entire stakes heading into Q4. Intriguingly, Stephen DuBois’ Camber Capital Management cut the biggest stake of all the hedgies tracked by Insider Monkey, worth about $4.2 million in stock, and Chuck Royce’s Royce & Associates was right behind this move, as the fund dropped about $3.7 million worth of shares. These bearish behaviors are interesting, as total hedge fund interest fell by 2 funds heading into Q4.

Let’s now take a look at hedge fund activity in other stocks similar to OraSure Technologies, Inc. (NASDAQ:OSUR). We will take a look at U.S. Lime & Minerals Inc. (NASDAQ:USLM), Adamas Pharmaceuticals Inc (NASDAQ:ADMS), Aerohive Networks Inc (NYSE:HIVE), and IDT Corporation (NYSE:IDT). This group of stocks’ market caps resemble OSUR’s market cap.

As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $51 million. That figure was $74 million in OSUR’s case. Adamas Pharmaceuticals Inc (NASDAQ:ADMS) is the most popular stock in this table. On the other hand U.S. Lime & Minerals Inc. (NASDAQ:USLM) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks OraSure Technologies, Inc. (NASDAQ:OSUR) 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