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Did Hedge Funds Make The Right Call On Oxford Immunotec Global PLC (OXFD) ?

At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (see why hell is coming). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Oxford Immunotec Global PLC (NASDAQ:OXFD) at the end of the first quarter and determine whether the smart money was really smart about this stock.

Is Oxford Immunotec Global PLC (NASDAQ:OXFD) the right pick for your portfolio? Investors who are in the know were getting more optimistic. The number of bullish hedge fund bets went up by 3 recently. Our calculations also showed that OXFD isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). OXFD was in 20 hedge funds’ portfolios at the end of the first quarter of 2020. There were 17 hedge funds in our database with OXFD holdings at the end of the previous quarter.

Video: Watch our video about the top 5 most popular hedge fund stocks.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (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 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

James Flynn Deerfield Management

James E. Flynn of Deerfield Management

At Insider Monkey we scour multiple sources to uncover the next great investment idea. Hedge fund sentiment towards Tesla reached its all time high at the end of 2019 and Tesla shares more than tripled this year. We are trying to identify other EV revolution winners, so we are checking out this under-the-radar lithium stock. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. With all of this in mind let’s take a gander at the fresh hedge fund action surrounding Oxford Immunotec Global PLC (NASDAQ:OXFD).

What does smart money think about Oxford Immunotec Global PLC (NASDAQ:OXFD)?

Heading into the second quarter of 2020, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 18% from the previous quarter. By comparison, 17 hedge funds held shares or bullish call options in OXFD a year ago. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).

Is OXFD A Good Stock To Buy?

Among these funds, Polar Capital held the most valuable stake in Oxford Immunotec Global PLC (NASDAQ:OXFD), which was worth $23.8 million at the end of the third quarter. On the second spot was Endurant Capital Management which amassed $15.7 million worth of shares. Alyeska Investment Group, Rima Senvest Management, and Consonance Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Endurant Capital Management allocated the biggest weight to Oxford Immunotec Global PLC (NASDAQ:OXFD), around 7.12% of its 13F portfolio. Stonepine Capital is also relatively very bullish on the stock, dishing out 3.67 percent of its 13F equity portfolio to OXFD.

As industrywide interest jumped, specific money managers have jumped into Oxford Immunotec Global PLC (NASDAQ:OXFD) headfirst. Stonepine Capital, managed by Timothy P. Lynch, created the biggest position in Oxford Immunotec Global PLC (NASDAQ:OXFD). Stonepine Capital had $3.5 million invested in the company at the end of the quarter. James E. Flynn’s Deerfield Management also made a $1.4 million investment in the stock during the quarter. The following funds were also among the new OXFD investors: Greg Eisner’s Engineers Gate Manager and Paul Marshall and Ian Wace’s Marshall Wace LLP.

Let’s check out hedge fund activity in other stocks similar to Oxford Immunotec Global PLC (NASDAQ:OXFD). These stocks are MutualFirst Financial, Inc. (NASDAQ:MFSF), W&T Offshore, Inc. (NYSE:WTI), Carter Bank & Trust (NASDAQ:CARE), and Dynex Capital Inc (NYSE:DX). This group of stocks’ market values are similar to OXFD’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MFSF 6 27492 -1
WTI 11 17865 -6
CARE 7 10648 2
DX 8 8262 0
Average 8 16067 -1.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $16 million. That figure was $102 million in OXFD’s case. W&T Offshore, Inc. (NYSE:WTI) is the most popular stock in this table. On the other hand MutualFirst Financial, Inc. (NASDAQ:MFSF) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Oxford Immunotec Global PLC (NASDAQ:OXFD) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 18.6% in 2020 through July 27th but still managed to beat the market by 17.1 percentage points. Hedge funds were also right about betting on OXFD as the stock returned 44.6% since Q1 and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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Disclosure: None. This article was originally published at Insider Monkey.