Is Quidel Corporation (QDEL) Going to Burn These Hedge Funds?

Quidel Corporation (NASDAQ:QDEL) investors should pay attention to an increase in hedge fund interest of late.

To most stock holders, hedge funds are viewed as worthless, old financial tools of years past. While there are more than 8000 funds trading today, we choose to focus on the crème de la crème of this group, close to 450 funds. It is widely believed that this group has its hands on the lion’s share of all hedge funds’ total asset base, and by watching their best picks, we have uncovered a number of investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).

Mario Gabelli

Equally as beneficial, optimistic insider trading sentiment is another way to parse down the stock market universe. Just as you’d expect, there are a number of stimuli for an executive to drop shares of his or her company, but just one, very clear reason why they would initiate a purchase. Many academic studies have demonstrated the market-beating potential of this tactic if shareholders know where to look (learn more here).

With all of this in mind, let’s take a gander at the latest action encompassing Quidel Corporation (NASDAQ:QDEL).

What does the smart money think about Quidel Corporation (NASDAQ:QDEL)?

At the end of the fourth quarter, a total of 6 of the hedge funds we track were long in this stock, a change of 20% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes significantly.

According to our comprehensive database, GAMCO Investors, managed by Mario Gabelli, holds the largest position in Quidel Corporation (NASDAQ:QDEL). GAMCO Investors has a $10.9 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Anand Parekh of Alyeska Investment Group, with a $9.7 million position; 0.4% of its 13F portfolio is allocated to the stock. Other peers with similar optimism include Paul Tudor Jones’s Tudor Investment Corp, Jacob Gottlieb’s Visium Asset Management and Cliff Asness’s AQR Capital Management.

As one would reasonably expect, some big names were breaking ground themselves. Tudor Investment Corp, managed by Paul Tudor Jones, established the most outsized position in Quidel Corporation (NASDAQ:QDEL). Tudor Investment Corp had 5.1 million invested in the company at the end of the quarter. Jacob Gottlieb’s Visium Asset Management also initiated a $0.5 million position during the quarter.

What have insiders been doing with Quidel Corporation (NASDAQ:QDEL)?

Bullish insider trading is at its handiest when the company we’re looking at has experienced transactions within the past 180 days. Over the latest six-month time period, Quidel Corporation (NASDAQ:QDEL) has experienced zero unique insiders buying, and 2 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Quidel Corporation (NASDAQ:QDEL). These stocks are AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG), Neogen Corporation (NASDAQ:NEOG), Synta Pharmaceuticals Corp. (NASDAQ:SNTA), Abaxis Inc (NASDAQ:ABAX), and Meridian Bioscience, Inc. (NASDAQ:VIVO). This group of stocks are the members of the diagnostic substances industry and their market caps are closest to QDEL’s market cap.