Hedge Funds Aren’t Crazy About Meridian Bioscience, Inc. (VIVO) Anymore
Is Meridian Bioscience, Inc. (NASDAQ:VIVO) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is Meridian Bioscience, Inc. (NASDAQ:VIVO) undervalued? The smart money was cutting their exposure. The number of bullish hedge fund positions went down by 2 lately. Meridian Bioscience, Inc. (NASDAQ:VIVO) was in 16 hedge funds' portfolios at the end of March. 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 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.
Lee Ainslie of Maverick Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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 go over the new hedge fund action regarding Meridian Bioscience, Inc. (NASDAQ:VIVO).
Do Hedge Funds Think VIVO Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of -11% from one quarter earlier. On the other hand, there were a total of 20 hedge funds with a bullish position 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.
More specifically, Renaissance Technologies was the largest shareholder of Meridian Bioscience, Inc. (NASDAQ:VIVO), with a stake worth $51.2 million reported as of the end of March. Trailing Renaissance Technologies was Deerfield Management, which amassed a stake valued at $23.3 million. Royce & Associates, Millennium Management, and GAMCO Investors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Deerfield Management allocated the biggest weight to Meridian Bioscience, Inc. (NASDAQ:VIVO), around 0.49% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, designating 0.15 percent of its 13F equity portfolio to VIVO.
Because Meridian Bioscience, Inc. (NASDAQ:VIVO) has experienced a decline in interest from the entirety of the hedge funds we track, logic holds that there exists a select few hedge funds who were dropping their positions entirely by the end of the first quarter. It's worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital cut the biggest stake of the 750 funds tracked by Insider Monkey, totaling close to $8.8 million in stock. Paul Marshall and Ian Wace's fund, Marshall Wace LLP, also sold off its stock, about $2.4 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds by the end of the first quarter.
Let's now take a look at hedge fund activity in other stocks similar to Meridian Bioscience, Inc. (NASDAQ:VIVO). These stocks are GreenSky, Inc. (NASDAQ:GSKY), MTS Systems Corporation (NASDAQ:MTSC), Repare Therapeutics Inc. (NASDAQ:RPTX), 111, Inc. (NASDAQ:YI), Rite Aid Corporation (NYSE:RAD), Golar LNG Limited (NASDAQ:GLNG), and Benchmark Electronics, Inc. (NYSE:BHE). All of these stocks' market caps match VIVO's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GSKY,11,36914,-3 MTSC,17,106391,1 RPTX,18,427184,0 YI,4,5158,-1 RAD,16,82115,2 GLNG,20,265009,-11 BHE,11,38054,0 Average,13.9,137261,-1.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.9 hedge funds with bullish positions and the average amount invested in these stocks was $137 million. That figure was $123 million in VIVO's case. Golar LNG Limited (NASDAQ:GLNG) is the most popular stock in this table. On the other hand 111, Inc. (NASDAQ:YI) is the least popular one with only 4 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 61.4. 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 28.5% in 2021 through July 23rd and beat the market again by 10.1 percentage points. Unfortunately VIVO wasn't nearly as popular as these 5 stocks and hedge funds that were betting on VIVO were disappointed as the stock returned -26.1% since the end of March (through 7/23) 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.
