Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds' 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about BioNTech SE (NASDAQ:BNTX) in this article.
Is BioNTech SE (NASDAQ:BNTX) worth your attention right now? The best stock pickers were taking a bullish view. The number of long hedge fund positions advanced by 2 lately. BioNTech SE (NASDAQ:BNTX) was in 20 hedge funds' portfolios at the end of the second quarter of 2021. The all time high for this statistic was previously 18. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BNTX isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Philippe Laffont of Coatue Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, plant based food market is expected to explode 100-fold by 2050, so we are checking out this under-the-radar stock. We go through lists like the 10 best growth stocks to buy 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. 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. Now we're going to review the key hedge fund action surrounding BioNTech SE (NASDAQ:BNTX).
Do Hedge Funds Think BNTX Is A Good Stock To Buy Now?
At the end of June, a total of 20 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 15 hedge funds with a bullish position in BNTX a year ago. With hedge funds' positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
The largest stake in BioNTech SE (NASDAQ:BNTX) was held by Coatue Management, which reported holding $276.8 million worth of stock at the end of June. It was followed by Citadel Investment Group with a $187.4 million position. Other investors bullish on the company included Renaissance Technologies, Tairen Capital, and Millennium Management. In terms of the portfolio weights assigned to each position Tairen Capital allocated the biggest weight to BioNTech SE (NASDAQ:BNTX), around 11.11% of its 13F portfolio. Shanda Asset Management is also relatively very bullish on the stock, designating 1.36 percent of its 13F equity portfolio to BNTX.
Consequently, key hedge funds have been driving this bullishness. Renaissance Technologies, assembled the largest position in BioNTech SE (NASDAQ:BNTX). Renaissance Technologies had $73.6 million invested in the company at the end of the quarter. Larry Chen and Terry Zhang's Tairen Capital also initiated a $63.5 million position during the quarter. The other funds with new positions in the stock are Chen Tianqiao's Shanda Asset Management, D. E. Shaw's D E Shaw, and Bhagwan Jay Rao's Integral Health Asset Management.
Let's also examine hedge fund activity in other stocks similar to BioNTech SE (NASDAQ:BNTX). These stocks are Aon plc (NYSE:AON), IDEXX Laboratories, Inc. (NASDAQ:IDXX), General Dynamics Corporation (NYSE:GD), Takeda Pharmaceutical Company Limited (NYSE:TAK), Enterprise Products Partners L.P. (NYSE:EPD), Spotify Technology S.A. (NYSE:SPOT), and Public Storage (NYSE:PSA). This group of stocks' market caps resemble BNTX's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AON,68,8129736,-4 IDXX,39,3576489,-10 GD,37,6235948,6 TAK,19,551214,0 EPD,28,246056,2 SPOT,48,3496814,2 PSA,27,1089757,1 Average,38,3332288,-0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 38 hedge funds with bullish positions and the average amount invested in these stocks was $3332 million. That figure was $579 million in BNTX's case. Aon plc (NYSE:AON) 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 19 bullish hedge fund positions. BioNTech SE (NASDAQ:BNTX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BNTX is 38. 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 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. A small number of hedge funds were also right about betting on BNTX as the stock returned 24.3% since the end of the second quarter (through 10/22) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.