Before putting in our own effort and resources into finding a good investment, we can quickly utilize hedge fund expertise to give us a quick glimpse of whether that stock could make for a good addition to our portfolios. The odds are not exactly stacked in investors’ favor when it comes to beating the market, as evidenced by the fact that less than 49% of the stocks in the S&P 500 did so during the 12-month period ending October 30. However, 63% of hedge funds’ top 30 stock picks from the index did beat the market, and returned nearly twice as much on average as the index. Thus, we can see that the tireless research and efforts of hedge funds to identify winning stocks can work to our advantage when we know how to use the data. While not all of their picks will be winners, our odds are much better following their best stock picks than trying to go it alone.
Is Neogen Corporation (NASDAQ:NEOG) going to take off soon? Investors who are in the know are getting more bullish. The number of bullish hedge fund positions moved up by 5 recently. At the end of this article we will also compare NEOG to other stocks including Aircastle Limited (NYSE:AYR), Ormat Technologies, Inc. (NYSE:ORA), and Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA) to get a better sense of its popularity.
Follow Neogen Corp (NASDAQ:NEOG)
Follow Neogen Corp (NASDAQ:NEOG)
With all of this in mind, let’s take a peek at the new action encompassing Neogen Corporation (NASDAQ:NEOG).
What have hedge funds been doing with Neogen Corporation (NASDAQ:NEOG)?
Heading into Q4, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 63% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, managed by Jim Simons, holds the number one position in Neogen Corporation (NASDAQ:NEOG). Renaissance Technologies has a $12.3 million position in the stock, comprising less than 0.1% of its 13F portfolio. The second largest stake is held by Select Equity Group, led by Robert Joseph Caruso, holding a $3.3 million position; less than 0.1% of its 13F portfolio is allocated to the company. Other professional money managers with similar optimism consist of Ken Griffin’s Citadel Investment Group, Andrew Sandler’s Sandler Capital Management and Matthew Hulsizer’s PEAK6 Capital Management.
Consequently, key hedge funds have been driving this bullishness. Sandler Capital Management, managed by Andrew Sandler, initiated the most valuable position in Neogen Corporation (NASDAQ:NEOG). Sandler Capital Management had $1.3 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also made a $1 million investment in the stock during the quarter. The following funds were also among the new NEOG investors: Columbus Circle Investors, D E Shaw, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Neogen Corporation (NASDAQ:NEOG) but similarly valued. These stocks are Aircastle Limited (NYSE:AYR), Ormat Technologies, Inc. (NYSE:ORA), Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA), and Amicus Therapeutics, Inc. (NASDAQ:FOLD). This group of stocks’ market valuations match NEOG’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AYR | 10 | 86914 | -3 |
| ORA | 7 | 25306 | -5 |
| LTRPA | 27 | 622359 | -6 |
| FOLD | 26 | 630704 | -5 |
As you can see these stocks had an average of 17.5 hedge funds with bullish positions and the average amount invested in these stocks was $341 million. That figure was $25 million in NEOG’s case. Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA) is the most popular stock in this table. On the other hand Ormat Technologies, Inc. (NYSE:ORA) is the least popular one with only 7 bullish hedge fund positions. Neogen Corporation (NASDAQ:NEOG) 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 LTRPA might be a better candidate to consider a long position.
