Is China Biologic Products Inc (CBPO) A Good Stock To Buy?

Out of thousands of stocks that are currently traded on the market, it might be really difficult to determine those that can really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs/PhDs, industry experts, and they are well connected to get tips from insiders. Individual investors can piggyback hedge funds and may be able to benefit from their vast resources. We analyze quarterly 13F filings of over 700 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about China Biologic Products Inc (NASDAQ:CBPO).

China Biologic Products Inc (NASDAQ:CBPO) was in 19 hedge funds’ portfolios at the end of the third quarter of 2015. CBPO has seen a decrease in enthusiasm from smart money lately. There were 19 hedge funds in our database with CBPO holdings at the end of the previous quarter. At the end of this article we will also compare CBPO to other stocks, including Steven Madden, Ltd. (NASDAQ:SHOO), Eldorado Gold Corp (USA) (NYSE:EGO), and RLI Corp. (NYSE:RLI) to get a better sense of its popularity.

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In the 21st century investor’s toolkit there are many metrics stock market investors can use to analyze stocks. Some of the most underrated metrics are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the elite money managers can outpace their index-focused peers by a solid margin (see the details here).

Keeping this in mind, let’s take a gander at the new action regarding China Biologic Products Inc (NASDAQ:CBPO).

What does the smart money think about China Biologic Products Inc (NASDAQ:CBPO)?

At Q3’s end, a total of 19 of the hedge funds tracked by Insider Monkey were long in this stock, a change of 0% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Jacob Gottlieb’s Visium Asset Management had the biggest position in China Biologic Products Inc (NASDAQ:CBPO), worth close to $46.4 million, amounting to 0.6% of its total 13F portfolio. The second largest stake is held by Renaissance Technologies, managed by Jim Simons, which held a $34.9 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions consist of Bihua Chen’s Cormorant Asset Management, and John Overdeck and David Siegel’s Two Sigma Advisors.

Judging by the fact that China Biologic Products Inc (NASDAQ:CBPO) has faced bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there exists a select few hedge funds that decided to sell off their positions entirely in the third quarter. Intriguingly, Ted Kang’s Kylin Management said goodbye to the largest stake of all the hedgies followed by Insider Monkey, totaling about $21.7 million in stock, and Joseph Edelman of Perceptive Advisors was right behind this move, as the fund dropped about $17 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as China Biologic Products Inc (NASDAQ:CBPO) but similarly valued. We will take a look at Steven Madden, Ltd. (NASDAQ:SHOO), Eldorado Gold Corp (USA) (NYSE:EGO), RLI Corp. (NYSE:RLI), and Medical Properties Trust, Inc. (NYSE:MPW). All of these stocks’ market caps match CBPO’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SHOO 18 134345 3
EGO 14 55138 -1
RLI 13 109257 4
MPW 10 72602 3

As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $93 million.That figure was $154 millions in CBPO’s case. Steven Madden, Ltd. (NASDAQ:SHOO) is the most popular stock in this table. On the other hand Medical Properties Trust, Inc. (NYSE:MPW) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks China Biologic Products Inc (NASDAQ:CBPO) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to the other companies analyzed in this article, it may be a good idea to analyze it in detail and potentially include it in your portfolio.