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Hedge Funds Are Done Buying Bio-Techne Corporation (TECH)?

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Bio-Techne Corporation (NASDAQ:TECH).

Bio-Techne Corporation (NASDAQ:TECH) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 26 hedge funds’ portfolios at the end of the first quarter of 2020. 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 Zendesk Inc (NYSE:ZEN), Annaly Capital Management, Inc. (NYSE:NLY), and Henry Schein, Inc. (NASDAQ:HSIC) to gather more data points. Our calculations also showed that TECH 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).

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

To most traders, hedge funds are assumed to be underperforming, outdated investment tools of the past. While there are over 8000 funds trading at the moment, Our experts hone in on the leaders of this club, approximately 850 funds. These investment experts administer most of the smart money’s total capital, and by paying attention to their inimitable investments, Insider Monkey has deciphered a number of investment strategies that have historically outpaced Mr. Market. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

Chuck Royce

Chuck Royce of Royce & Associates

We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a look at the recent hedge fund action encompassing Bio-Techne Corporation (NASDAQ:TECH).

What does smart money think about Bio-Techne Corporation (NASDAQ:TECH)?

At the end of the first quarter, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards TECH over the last 18 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, Renaissance Technologies has the largest position in Bio-Techne Corporation (NASDAQ:TECH), worth close to $92.3 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by Robert Joseph Caruso of Select Equity Group, with a $63 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Remaining professional money managers that hold long positions contain Chuck Royce’s Royce & Associates, Steve Cohen’s Point72 Asset Management and Cliff Asness’s AQR Capital Management. In terms of the portfolio weights assigned to each position Sandler Capital Management allocated the biggest weight to Bio-Techne Corporation (NASDAQ:TECH), around 1.72% of its 13F portfolio. PDT Partners is also relatively very bullish on the stock, designating 0.62 percent of its 13F equity portfolio to TECH.

Since Bio-Techne Corporation (NASDAQ:TECH) has experienced declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there was a specific group of hedgies that decided to sell off their entire stakes by the end of the first quarter. It’s worth mentioning that David Harding’s Winton Capital Management said goodbye to the largest position of the 750 funds monitored by Insider Monkey, worth about $3 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also sold off its stock, about $1.6 million worth. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Bio-Techne Corporation (NASDAQ:TECH) but similarly valued. These stocks are Zendesk Inc (NYSE:ZEN), Annaly Capital Management, Inc. (NYSE:NLY), Henry Schein, Inc. (NASDAQ:HSIC), and Centrais Eletricas Brasileiras S.A. – Eletrobras (NYSE:EBR). This group of stocks’ market values resemble TECH’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ZEN 55 1262714 -6
NLY 27 224564 6
HSIC 35 1058541 -1
EBR 5 9710 -2
Average 30.5 638882 -0.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 30.5 hedge funds with bullish positions and the average amount invested in these stocks was $639 million. That figure was $313 million in TECH’s case. Zendesk Inc (NYSE:ZEN) is the most popular stock in this table. On the other hand Centrais Eletricas Brasileiras S.A. – Eletrobras (NYSE:EBR) is the least popular one with only 5 bullish hedge fund positions. Bio-Techne Corporation (NASDAQ:TECH) is not the least popular stock in this group but hedge fund interest is still below average. 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 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. A small number of hedge funds were also right about betting on TECH as the stock returned 39.8% during the second quarter and outperformed the market by an even larger margin.

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