Is IDEXX Laboratories, Inc. (IDXX) Going to Burn These Hedge Funds?

In this article we will analyze whether IDEXX Laboratories, Inc. (NASDAQ:IDXX) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.

Is IDEXX Laboratories, Inc. (NASDAQ:IDXX) the right investment to pursue these days? Prominent investors were becoming more confident. The number of long hedge fund positions moved up by 4 lately. IDEXX Laboratories, Inc. (NASDAQ:IDXX) was in 43 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 49. Our calculations also showed that IDXX isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. Now we’re going to check out the fresh hedge fund action surrounding IDEXX Laboratories, Inc. (NASDAQ:IDXX).

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

Heading into the fourth quarter of 2021, a total of 43 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards IDXX over the last 25 quarters. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

The largest stake in IDEXX Laboratories, Inc. (NASDAQ:IDXX) was held by Fundsmith LLP, which reported holding $2638.2 million worth of stock at the end of September. It was followed by Arrowstreet Capital with a $294.8 million position. Other investors bullish on the company included Echo Street Capital Management, Rock Springs Capital Management, and Select Equity Group. In terms of the portfolio weights assigned to each position Fundsmith LLP allocated the biggest weight to IDEXX Laboratories, Inc. (NASDAQ:IDXX), around 7.29% of its 13F portfolio. Montanaro Asset Management is also relatively very bullish on the stock, dishing out 4 percent of its 13F equity portfolio to IDXX.

With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Citadel Investment Group, managed by Ken Griffin, assembled the most outsized position in IDEXX Laboratories, Inc. (NASDAQ:IDXX). Citadel Investment Group had $29.9 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also made a $3.7 million investment in the stock during the quarter. The other funds with brand new IDXX positions are Matthew Tewksbury’s Stevens Capital Management, Donald Sussman’s Paloma Partners, and Alec Litowitz and Ross Laser’s Magnetar Capital.

Let’s now take a look at hedge fund activity in other stocks similar to IDEXX Laboratories, Inc. (NASDAQ:IDXX). We will take a look at Align Technology, Inc. (NASDAQ:ALGN), Lululemon Athletica inc. (NASDAQ:LULU), Public Storage (NYSE:PSA), NXP Semiconductors NV (NASDAQ:NXPI), Ferrari N.V. (NYSE:RACE), Itau Unibanco Holding SA (NYSE:ITUB), and Takeda Pharmaceutical Company Limited (NYSE:TAK). All of these stocks’ market caps match IDXX’s market cap.

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As you can see these stocks had an average of 33.4 hedge funds with bullish positions and the average amount invested in these stocks was $1045 million. That figure was $3699 million in IDXX’s case. NXP Semiconductors NV (NASDAQ:NXPI) is the most popular stock in this table. On the other hand Takeda Pharmaceutical Company Limited (NYSE:TAK) is the least popular one with only 15 bullish hedge fund positions. IDEXX Laboratories, Inc. (NASDAQ:IDXX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for IDXX is 74.2. 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 positive signal but 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately IDXX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on IDXX were disappointed as the stock returned -2.2% since the end of September (through 11/30) 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 many of these stocks already outperformed the market since 2019.

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

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