The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Meridian Bioscience, Inc. (NASDAQ:VIVO).
Is Meridian Bioscience, Inc. (NASDAQ:VIVO) ready to rally soon? Hedge funds were selling. The number of long hedge fund positions dropped by 4 recently. Meridian Bioscience, Inc. (NASDAQ:VIVO) was in 19 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 23. Our calculations also showed that VIVO isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. Keeping this in mind let’s view the latest hedge fund action encompassing Meridian Bioscience, Inc. (NASDAQ:VIVO).
Do Hedge Funds Think VIVO Is A Good Stock To Buy Now?
At third quarter’s end, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -17% from the second quarter of 2020. By comparison, 16 hedge funds held shares or bullish call options in VIVO a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Meridian Bioscience, Inc. (NASDAQ:VIVO) was held by Renaissance Technologies, which reported holding $46.6 million worth of stock at the end of September. It was followed by Deerfield Management with a $25.6 million position. Other investors bullish on the company included Arrowstreet Capital, Royce & Associates, and Two Sigma Advisors. In terms of the portfolio weights assigned to each position Deerfield Management allocated the biggest weight to Meridian Bioscience, Inc. (NASDAQ:VIVO), around 0.62% of its 13F portfolio. TwinBeech Capital is also relatively very bullish on the stock, dishing out 0.1 percent of its 13F equity portfolio to VIVO.
Judging by the fact that Meridian Bioscience, Inc. (NASDAQ:VIVO) has witnessed a decline in interest from the entirety of the hedge funds we track, it’s safe to say that there lies a certain “tier” of hedgies who were dropping their positions entirely by the end of the third quarter. Interestingly, Dmitry Balyasny’s Balyasny Asset Management dumped the largest investment of the “upper crust” of funds followed by Insider Monkey, worth about $5.9 million in stock. Roger Ibbotson’s fund, Zebra Capital Management, also dropped its stock, about $1.6 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 4 funds by the end of the third quarter.
Let’s now review hedge fund activity in other stocks similar to Meridian Bioscience, Inc. (NASDAQ:VIVO). These stocks are Armada Hoffler Properties Inc (NYSE:AHH), Vaxart, Inc. (NASDAQ:VXRT), OneSmart International Education Group Limited (NYSE:ONE), Provention Bio, Inc. (NASDAQ:PRVB), Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY), XPEL Inc. (NASDAQ:XPEL), and Protagonist Therapeutics, Inc. (NASDAQ:PTGX). All of these stocks’ market caps resemble VIVO’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.6 hedge funds with bullish positions and the average amount invested in these stocks was $127 million. That figure was $103 million in VIVO’s case. OneSmart International Education Group Limited (NYSE:ONE) is the most popular stock in this table. On the other hand Provention Bio, Inc. (NASDAQ:PRVB) is the least popular one with only 10 bullish hedge fund positions. Meridian Bioscience, Inc. (NASDAQ:VIVO) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VIVO is 70.8. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on VIVO as the stock returned 11.1% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.