Is DYAI Stock A Buy Here?

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 Dyadic International, Inc. (NASDAQ:DYAI).

Is DYAI stock a buy? Dyadic International, Inc. (NASDAQ:DYAI) was in 4 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 8. DYAI investors should be aware of a decrease in activity from the world’s largest hedge funds lately. There were 5 hedge funds in our database with DYAI holdings at the end of December. Our calculations also showed that DYAI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind let’s take a look at the key hedge fund action surrounding Dyadic International, Inc. (NASDAQ:DYAI).

Do Hedge Funds Think DYAI Is A Good Stock To Buy Now?

At the end of the first quarter, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of -20% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards DYAI over the last 23 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, George McCabe’s Portolan Capital Management has the number one position in Dyadic International, Inc. (NASDAQ:DYAI), worth close to $2.1 million, amounting to 0.2% of its total 13F portfolio. On Portolan Capital Management’s heels is Bandera Partners, managed by Gregory Bylinsky and Jefferson Gramm, which holds a $0.5 million position; 0.2% of its 13F portfolio is allocated to the company. Some other professional money managers with similar optimism include Ken Griffin’s Citadel Investment Group, Renaissance Technologies and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position Bandera Partners allocated the biggest weight to Dyadic International, Inc. (NASDAQ:DYAI), around 0.2% of its 13F portfolio. Portolan Capital Management is also relatively very bullish on the stock, dishing out 0.17 percent of its 13F equity portfolio to DYAI.

Seeing as Dyadic International, Inc. (NASDAQ:DYAI) has witnessed declining sentiment from the aggregate hedge fund industry, it’s easy to see that there is a sect of money managers that elected to cut their entire stakes by the end of the first quarter. At the top of the heap, Ken Griffin’s Citadel Investment Group dumped the biggest stake of the “upper crust” of funds followed by Insider Monkey, worth about $0.1 million in stock. Israel Englander’s fund, Millennium Management, also sold off its stock, about $0.1 million worth. These transactions are important to note, as total hedge fund interest fell by 1 funds by the end of the first quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Dyadic International, Inc. (NASDAQ:DYAI) but similarly valued. These stocks are X4 Pharmaceuticals, Inc. (NASDAQ:XFOR), First Community Corporation (NASDAQ:FCCO), Lyra Therapeutics, Inc. (NASDAQ:LYRA), Pluristem Therapeutics Inc. (NASDAQ:PSTI), Aspen Group Inc. (NASDAQ:ASPU), Immutep Limited (NASDAQ:IMMP), and Power REIT (NYSE:PW). All of these stocks’ market caps match DYAI’s market cap.

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As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $23 million. That figure was $3 million in DYAI’s case. X4 Pharmaceuticals, Inc. (NASDAQ:XFOR) is the most popular stock in this table. On the other hand First Community Corporation (NASDAQ:FCCO) is the least popular one with only 2 bullish hedge fund positions. Dyadic International, Inc. (NASDAQ:DYAI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for DYAI is 30.1. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and surpassed the market again by 3.3 percentage points. Unfortunately DYAI wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); DYAI investors were disappointed as the stock returned -33% since the end of March (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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

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