The government requires hedge funds and wealthy investors with over a certain portfolio size to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings discloses the funds’ positions on September 30. We at Insider Monkey have made an extensive database of more than 700 of those elite funds and prominent investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Sinovac Biotech Ltd. (NASDAQ:SVA) based on those filings.
Is Sinovac Biotech Ltd. (NASDAQ:SVA) undervalued? The best stock pickers are taking an optimistic view. The number of long hedge fund bets inched up by 1 recently. It is important to note that the shares of Sinovac Biotech Ltd. (NASDAQ:SVA) lost 3.24% share value during the quarter, making the hedge fund sentiment even more optimistic. In order to understand the bullish bets of hedgies, we will cover hedge funds that held stake in the company, at the end of the third quarter.
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 United Insurance Holdings Corp. (NASDAQ:UIHC), MGP Ingredients Inc (NASDAQ:MGPI), and Tangoe Inc (NASDAQ:TNGO) to gather more data points.
In today’s marketplace, there are several signals investors employ to assess stocks. A couple of the less known signals are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the top picks of the top money managers can trounce the broader indices by a significant margin (see the details here).
Now, let’s view the key action encompassing Sinovac Biotech Ltd. (NASDAQ:SVA).
What does the smart money think about Sinovac Biotech Ltd. (NASDAQ:SVA)?
Heading into Q4, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 17% from the second quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Samuel Isaly’s OrbiMed Advisors has the largest position in Sinovac Biotech Ltd. (NASDAQ:SVA), worth close to $13.6 million, amounting to 0.1% of its total 13F portfolio. The second largest stake is held by Renaissance Technologies, which holds a $6.6 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions contain Brian Taylor’s Pine River Capital Management, John Overdeck and David Siegel’s Two Sigma Advisors, and Israel Englander’s Millennium Management.
Now, some big names were breaking ground themselves. Millennium Management assembled the largest position in Sinovac Biotech Ltd. (NASDAQ:SVA). Millennium Management had $0.1 million invested in the company at the end of the quarter. Chao Ku’s Nine Chapters Capital Management also made a $0.1 million investment in the stock during the quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Sinovac Biotech Ltd. (NASDAQ:SVA) but similarly valued. These stocks are United Insurance Holdings Corp. (NASDAQ:UIHC), MGP Ingredients Inc (NASDAQ:MGPI), Tangoe Inc (NASDAQ:TNGO), and SurModics, Inc. (NASDAQ:SRDX). This group of stocks’ market valuations are similar to Sinovac Biotech Ltd. (NASDAQ:SVA)’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see, these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $25 million. That figure was $23 million in Sinovac Biotech Ltd. (NASDAQ:SVA)’s case. SurModics, Inc. (NASDAQ:SRDX) is the most popular stock in this table. On the other hand, MGP Ingredients Inc (NASDAQ:MGPI) is the least popular one with only 6 bullish hedge fund positions. Sinovac Biotech Ltd. (NASDAQ:SVA) 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, SurModics, Inc. (NASDAQ:SRDX) might be a better candidate to consider a long position.