Hedge Funds Are Dumping Qiagen NV (QGEN)

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 (Recession is Imminent: We Need A Travel Ban NOW). 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 Qiagen NV (NASDAQ:QGEN).

Qiagen NV (NASDAQ:QGEN) was in 30 hedge funds’ portfolios at the end of March. QGEN has seen a decrease in hedge fund sentiment lately. There were 51 hedge funds in our database with QGEN holdings at the end of the previous quarter. Our calculations also showed that QGEN 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.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Dmitry Balyasny of Balyasny Asset Managemnet

Dmitry Balyasny of Balyasny Asset Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. 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. Now let’s take a peek at the new hedge fund action encompassing Qiagen NV (NASDAQ:QGEN).

How have hedgies been trading Qiagen NV (NASDAQ:QGEN)?

Heading into the second quarter of 2020, a total of 30 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -41% from one quarter earlier. On the other hand, there were a total of 23 hedge funds with a bullish position in QGEN a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is QGEN A Good Stock To Buy?

The largest stake in Qiagen NV (NASDAQ:QGEN) was held by Magnetar Capital, which reported holding $100.8 million worth of stock at the end of September. It was followed by Balyasny Asset Management with a $56.8 million position. Other investors bullish on the company included Two Sigma Advisors, Millennium Management, and D E Shaw. In terms of the portfolio weights assigned to each position Jet Capital Investors allocated the biggest weight to Qiagen NV (NASDAQ:QGEN), around 5.94% of its 13F portfolio. Magnetar Capital is also relatively very bullish on the stock, dishing out 2.43 percent of its 13F equity portfolio to QGEN.

Because Qiagen NV (NASDAQ:QGEN) has witnessed declining sentiment from hedge fund managers, we can see that there was a specific group of hedgies who were dropping their positions entirely by the end of the first quarter. Intriguingly, Farallon Capital sold off the largest stake of the 750 funds followed by Insider Monkey, totaling about $72.8 million in stock, and Clint Carlson’s Carlson Capital was right behind this move, as the fund said goodbye to about $31.3 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 21 funds by the end of the first quarter.

Let’s also examine hedge fund activity in other stocks similar to Qiagen NV (NASDAQ:QGEN). We will take a look at NVR, Inc. (NYSE:NVR), Open Text Corporation (NASDAQ:OTEX), ArcelorMittal (NYSE:MT), and Tradeweb Markets Inc. (NASDAQ:TW). This group of stocks’ market values are similar to QGEN’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NVR 34 744980 4
OTEX 18 376098 4
MT 13 123110 -4
TW 30 355406 -6
Average 23.75 399899 -0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 23.75 hedge funds with bullish positions and the average amount invested in these stocks was $400 million. That figure was $342 million in QGEN’s case. NVR, Inc. (NYSE:NVR) is the most popular stock in this table. On the other hand ArcelorMittal (NYSE:MT) is the least popular one with only 13 bullish hedge fund positions. Qiagen NV (NASDAQ:QGEN) is not the most popular stock in this group but hedge fund interest is still above average. 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 8.3% in 2020 through the end of May but beat the market by 13.2 percentage points. Unfortunately QGEN wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on QGEN were disappointed as the stock returned 5.3% during the same time period 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.

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