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 third 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 BioLife Solutions, Inc. (NASDAQ:BLFS) based on that data.
Is BLFS a good stock to buy now? BioLife Solutions, Inc. (NASDAQ:BLFS) was in 13 hedge funds’ portfolios at the end of September. The all time high for this statistic is 15. BLFS investors should be aware of an increase in hedge fund sentiment recently. There were 11 hedge funds in our database with BLFS positions at the end of the second quarter. Our calculations also showed that BLFS isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
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 real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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. Now let’s take a peek at the fresh hedge fund action encompassing BioLife Solutions, Inc. (NASDAQ:BLFS).
Do Hedge Funds Think BLFS Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of 18% from the previous quarter. The graph below displays the number of hedge funds with bullish position in BLFS over the last 21 quarters. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
The largest stake in BioLife Solutions, Inc. (NASDAQ:BLFS) was held by Casdin Capital, which reported holding $169 million worth of stock at the end of September. It was followed by Park West Asset Management with a $28 million position. Other investors bullish on the company included Royce & Associates, Millennium Management, and Sandler Capital Management. In terms of the portfolio weights assigned to each position Casdin Capital allocated the biggest weight to BioLife Solutions, Inc. (NASDAQ:BLFS), around 7.57% of its 13F portfolio. Park West Asset Management is also relatively very bullish on the stock, earmarking 1.08 percent of its 13F equity portfolio to BLFS.
Consequently, specific money managers have been driving this bullishness. Pura Vida Investments, managed by Efrem Kamen, initiated the most outsized position in BioLife Solutions, Inc. (NASDAQ:BLFS). Pura Vida Investments had $4.5 million invested in the company at the end of the quarter. Kevin Molloy’s Iron Triangle Partners also made a $4.3 million investment in the stock during the quarter. The other funds with brand new BLFS positions are D. E. Shaw’s D E Shaw and Philip Hempleman’s Ardsley Partners.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as BioLife Solutions, Inc. (NASDAQ:BLFS) but similarly valued. These stocks are New Mountain Finance Corp. (NYSE:NMFC), City Holding Company (NASDAQ:CHCO), NetGear, Inc. (NASDAQ:NTGR), Pitney Bowes Inc. (NYSE:PBI), Enanta Pharmaceuticals Inc (NASDAQ:ENTA), Banco Macro SA (NYSE:BMA), and nLIGHT, Inc. (NASDAQ:LASR). All of these stocks’ market caps resemble BLFS’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.4 hedge funds with bullish positions and the average amount invested in these stocks was $72 million. That figure was $254 million in BLFS’s case. Pitney Bowes Inc. (NYSE:PBI) is the most popular stock in this table. On the other hand City Holding Company (NASDAQ:CHCO) is the least popular one with only 6 bullish hedge fund positions. BioLife Solutions, Inc. (NASDAQ:BLFS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BLFS is 53.6. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on BLFS as the stock returned 28.6% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.