Hedge Funds Are Crazy About Meridian Bioscience, Inc. (VIVO)

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the second quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of Meridian Bioscience, Inc. (NASDAQ:VIVO) based on that data and determine whether they were really smart about the stock.

Is Meridian Bioscience, Inc. (NASDAQ:VIVO) ready to rally soon? Investors who are in the know were in an optimistic mood. The number of long hedge fund positions rose by 3 in recent months. Meridian Bioscience, Inc. (NASDAQ:VIVO) was in 23 hedge funds’ portfolios at the end of June. The all time high for this statistics is 20. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that VIVO isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). There were 20 hedge funds in our database with VIVO holdings at the end of March.

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

According to most stock holders, hedge funds are seen as slow, outdated financial tools of yesteryear. While there are over 8000 funds in operation at present, Our researchers hone in on the crème de la crème of this group, approximately 850 funds. These investment experts control the majority of the smart money’s total asset base, and by following their finest picks, Insider Monkey has figured out several investment strategies that have historically beaten the market. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 34% since February 2017 (through August 17th) even though the market was up 53% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

James Flynn Deerfield Management

James E. Flynn of Deerfield Management

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost precious metals prices. So, we are checking out this lithium company which could also benefit from the electric car adoption. 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. You can subscribe to our free daily newsletter on our website to get excerpts of these letters in your inbox. With all of this in mind let’s take a gander at the latest hedge fund action surrounding Meridian Bioscience, Inc. (NASDAQ:VIVO).

Hedge fund activity in Meridian Bioscience, Inc. (NASDAQ:VIVO)

At Q2’s end, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of 15% from one quarter earlier. By comparison, 17 hedge funds held shares or bullish call options in VIVO a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Meridian Bioscience, Inc. (NASDAQ:VIVO) was held by Renaissance Technologies, which reported holding $70.2 million worth of stock at the end of September. It was followed by Deerfield Management with a $38.7 million position. Other investors bullish on the company included Millennium Management, Arrowstreet Capital, and Two Sigma Advisors. In terms of the portfolio weights assigned to each position Zebra Capital Management allocated the biggest weight to Meridian Bioscience, Inc. (NASDAQ:VIVO), around 2.28% of its 13F portfolio. Deerfield Management is also relatively very bullish on the stock, earmarking 1.13 percent of its 13F equity portfolio to VIVO.

As one would reasonably expect, some big names have been driving this bullishness. Deerfield Management, managed by James E. Flynn, initiated the most valuable position in Meridian Bioscience, Inc. (NASDAQ:VIVO). Deerfield Management had $38.7 million invested in the company at the end of the quarter. Philip Hempleman’s Ardsley Partners also initiated a $0.5 million position during the quarter. The following funds were also among the new VIVO investors: Louis Navellier’s Navellier & Associates, Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, and Brian Ashford-Russell and Tim Woolley’s Polar Capital.

Let’s check out hedge fund activity in other stocks similar to Meridian Bioscience, Inc. (NASDAQ:VIVO). We will take a look at United Natural Foods, Inc. (NYSE:UNFI), SilverCrest Metals Inc. (NYSE:SILV), Archrock, Inc. (NYSE:AROC), Matador Resources Co (NYSE:MTDR), PetIQ, Inc. (NASDAQ:PETQ), Gossamer Bio, Inc. (NASDAQ:GOSS), and New York Mortgage Trust, Inc. (NASDAQ:NYMT). All of these stocks’ market caps are closest to VIVO’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
UNFI 21 62895 3
SILV 9 104921 0
AROC 12 23184 1
MTDR 23 101616 6
PETQ 16 143510 3
GOSS 19 168888 9
NYMT 15 50577 2
Average 16.4 93656 3.4

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.4 hedge funds with bullish positions and the average amount invested in these stocks was $94 million. That figure was $174 million in VIVO’s case. Matador Resources Co (NYSE:MTDR) is the most popular stock in this table. On the other hand SilverCrest Metals Inc. (NYSE:SILV) is the least popular one with only 9 bullish hedge fund positions. Meridian Bioscience, Inc. (NASDAQ:VIVO) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VIVO is 88. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 gained 24.8% in 2020 through the end of September and beat the market by 19.3 percentage points. Unfortunately VIVO wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on VIVO were disappointed as the stock returned -27.1% in Q3 and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.

Follow Fresh Tracks Therapeutics Inc. (NASDAQ:FRTX)

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