The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards BioSpecifics Technologies Corp. (NASDAQ:BSTC).
BioSpecifics Technologies Corp. (NASDAQ:BSTC) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 6 hedge funds’ portfolios at the end of the third quarter of 2016. At the end of this article we will also compare BSTC to other stocks including Compugen Ltd. (USA) (NASDAQ:CGEN), American Public Education, Inc. (NASDAQ:APEI), and Trinity Biotech plc (ADR) (NASDAQ:TRIB) to get a better sense of its popularity.
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.
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Now, we’re going to review the new action surrounding BioSpecifics Technologies Corp. (NASDAQ:BSTC).
Hedge fund activity in BioSpecifics Technologies Corp. (NASDAQ:BSTC)
At Q3’s end, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, unchanged from the previous quarter. By comparison, 8 hedge funds held shares or bullish call options in BSTC heading into this year. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, one of the largest hedge funds in the world, holds the largest position in BioSpecifics Technologies Corp. (NASDAQ:BSTC). According to regulatory filings, the fund has a $13.8 million position in the stock. Sitting at the No. 2 spot is Chuck Royce of Royce & Associates, with a $3.5 million position. Remaining hedge funds and institutional investors that are bullish consist of Cliff Asness’ AQR Capital Management, Nathan Fischel’s DAFNA Capital Management and John Overdeck and David Siegel’s Two Sigma Advisors. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as BioSpecifics Technologies Corp. (NASDAQ:BSTC) but similarly valued. We will take a look at Compugen Ltd. (USA) (NASDAQ:CGEN), American Public Education, Inc. (NASDAQ:APEI), Trinity Biotech plc (ADR) (NASDAQ:TRIB), and CONN’S, Inc. (NASDAQ:CONN). This group of stocks’ market values match BSTC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CGEN | 5 | 29603 | -1 |
| APEI | 15 | 44779 | 0 |
| TRIB | 14 | 56626 | 1 |
| CONN | 13 | 71847 | 7 |
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $51 million. That figure was $22 million in BSTC’s case. American Public Education, Inc. (NASDAQ:APEI) is the most popular stock in this table. On the other hand Compugen Ltd. (USA) (NASDAQ:CGEN) is the least popular one with only 5 bullish hedge fund positions. BioSpecifics Technologies Corp. (NASDAQ:BSTC) 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 APEI might be a better candidate to consider taking a long position in.
Disclosure: None
