How to Use BPIQ to Beat the Market

This post provides some ideas on how to Use BPIQ's Hedge Fund Data And Model Portfolios to Beat the Major Biotech ETFs.

• 1) Use public data on holdings of top biopharma-focused hedge funds (BFHFs) to improve your chances of success in investing in this sector (FN^1)

  • Focus on biopharma stocks held by at least 1 BHFH

  • Our hedge fund screener tool makes it easy for you to determine how many BFHFs hold any ticker

• 2) Use holdings of our BPIQ portfolios as part of your biopharma smid-cap stock diligence

  • Our "how-to" section immediately below provides simple step-by-step instructions

A. Invest in biopharma stocks held by at least 1 biopharma-focused hedge fund (FN^1)

One simple way to use our hedge fund data to help your investment decisions and strategy, especially if you are more of a hands-on biopharma investor, is to simply run any of the stocks you are analyzing in our BPIQ hedge fund screener tool to confirm that your target stock is held by at least 1 major biopharma-focused hedge funds (BFHF). In our anecdotal experience with our BPIQ portfolios, stocks that are held by 0 BFHFs are much less likely to yield good returns compared compared to those held by 1 or more BFHF. Think about it: Of the teams of experienced analysts and supporting teams and systems at each of these BHFHs, none of them have identified that target company as one worth investing in. So why would you take that chance? See FN^2 below if you want more details about this.

B. Use our BPIQ portfolio holdings to improve your biopharma stock diligence (FN^1)

Our current holdings of our BPIQ model portfolios (FN^3) are based on our updated BFHF strategies that provided the best results in extensive back-testing, and have yielded exceptional returns of over 30% and beating XBI since we implemented them in 2023. As we started to track performance of top holdings of BFHFs some years ago, we noticed that such stocks tend to outperform XBI, the major ETF that holds mostly smid-cap biopharma companies. As detailed in our accompanying post with updated BPIQ model portfolios performance data since we implemented these updated strategies in April and September 2023, our portfolios continue to beat the biotech stock indices and the broader market.

We are making changes to BPIQ for Elite subscribers to make it easier for you to use our portfolio holdings' targets to improve your investment diligence/strategies. For example, we have simplified our portfolios such that 4 of our current 5 portfolios hold 10, 15, 20, or 50 hedge fund favorite smid-cap biopharma tickers (FN^3). For these portfolios, target holdings and percentages updated once per quarter. Our 5th BPIQ portfolio is our Run-Up portfolio, whose holdings are companies from our 50 hedge fund favorite account that have upcoming or recent catalyst events. Holdings in this portfolio change throughout the quarter, typically based on upcoming or recent catalyst readouts.

Here's a step-by-step guide on how to use these BPIQ portfolio holdings to help in your smid-cap biopharma stock diligence/analysis/picks (FN^1):

1) Click the link "Click HERE for Current Targets" on our Elite portfolios page, to see a table with the latest targets for stock holdings of our BPIQ model portfolios, which are actual stock brokerage accounts (FN^3). Here's a screenshot of the current top portion of that table with holding targets for the 5 BPIQ portfolios that we currently manage:

As indicated above, the targets are typically updated for all of the portfolios except the Run-Up portfolio, once per quarter (See FN^4 for more info).

2) Look for quarterly model portfolio updates in our BPIQ Elite subscriber emails

Going forward, we plan to send an email to our Elite subscribers within a week of updating any of our model portfolio targets, except for our BPIQ Run-Up portfolio. Thus, Elite subscribers will receive an email from us, likely once per quarter, when our portfolio targets are updated for any of the quarterly BPIQ portfolios. Then Elite subscribers can go to this sheet using the link above and see the latest targets, and can consider our latest portfolio targets as they perform diligence and make decisions on their investment decisions.

Currently, we also tweet and post to our private discord when we make trades on the accounts. For the quarterly portfolios, this mainly occurs during a period within a week one timer per quarter, as we update our positions to our targets. If you are an Elite subscriber and want to follow along with the trades on the private twitter feed and are not sure how, or have other questions or comments about this, please send us an email at support@bpiq.com.

3) Use the BPIQ model portfolio information as part of your investing diligence

The primary way that Elite subscribers can use our BPIQ model portfolios' target holding information as part of their smid-cap biopharma stock analysis/diligence, is to focus some of their diligence on any of the tickers held by any of our portfolios. The tickers in these portfolios are one of 10 to 50 smid-cap holdings of top performing biopharma strategies based on our back-testing. Of course, we cannot give you investment advice (FN^1). Thus, we can only recommend as another idea for elite subscribers, that you create and track the performance, of a hypothetical account that does not risk your money, with the holdings of any of our BPIQ portfolios (FN^5). We will continue to post updates on the performance of our BPIQ portfolios. See our accompanying post for recent performance information.

In summary, this post is intended to help you get better returns for your biopharma stock investing by using hedge fund data (FN^1). You can focus your smid-cap biopharma stock diligence on stocks held by at least 1 BFHF. Furthermore, Elite subscribers can use our BPIQ model portfolios' holdings as part of their smid-cap biopharma stock diligence.

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Footnotes

^1

Investing in smid-cap biopharma stocks is risky. Past stock performance does not guarantee future performance. This post is not investment advice. Please do your own diligence and consult a financial professional before making any stock investment decisions.

^2

We follow the 34 major biopharma-focused hedge funds that we identified. At least 1 of these BFHFs hold over 500 smid-cap biopharma stocks; So why take the risk of investing in stocks held by 0 BFHFs? Based on our Q2 2024 data for example, 509 biopharma companies (over 1/2 of smid-cap biopharma companies), are held by at least 1 BFHF. That gives you lots of smid-cap biopharma companies to diligence and invest in.

Sure, there are some companies held by 0 BFHFs that have performed well. But in our experience in our portfolios, it is much more common for such stocks to underperform XBI generally. We used to take the increased risk of investing in 0 BFHF stocks in some of our portfolios. And the results did not turn out well. So we stopped including any stocks held by 0 BFHFs in our portfolios. Increase your chances of success and narrow your stock picks to these companies held by at least 1 BFHF.

If you want deeper data on BFHF holdings based on Q2 2024 data, of the 509 biopharma companies held by at least 1 BFHF, the median ticker was held 3 BFHFs, the 90 percentile ticker was held by 7 BFHFs, and the ticker EWTX was held by 13 BFHFs, the most of any stock.

^3

Our BPIQ portfolios are real-world stock brokerage accounts where one of our co-founders and/or his holding company invest their money. Our current BPIQ portfolios are the Top 10 HF Holdings, the Top 15 HF Holdings, the Top 20 HF Holdings, the Top 50 HF Holdings, and the Run-Up portfolios.

^4

These updates are made in the middle of a quarter within weeks of quarterly hedge fund holding SEC filings. Within the past few weeks we used publicly available Q3 holdings data of BHFHs to update the targets for the BPIQ Top 10 HF Holdings portfolio (formerly our BPIQ Core portfolio), the BPIQ Top 15 HF Holdings portfolio (formerly our BPIQ HF Favs (Cons) portfolio) and the BPIQ Top 20 HF Holdings portfolio (Formerly our BPIQ HF Favs (Top 20s) portfolio). By the end of next week, we plan to update the targets for the BPIQ Top 50 HF Holdings portfolio (Formerly Spread-the-Risk portfolio). Our BPIQ Run-Up portfolio target holdings are updated throughout the quarter depending on the timing of biopharma stock catalyst events for stocks held in that account. .

^5

Hypothetical portfolios that do not risk any real money but rather can be used to track performance of a group of holdings can be created using an online tool, a tool at your brokerage, or a spreadsheet with stock market data (e.g., Google Sheet or Microsoft Excel).

12/11/24 Article posted (EJV)

This article is not investment, legal or tax advice. Investing in smid-cap biopharma stocks is risky. Past stock performance does not guarantee future performance. This post is not investment advice. Please do your own diligence and consult a financial professional before making any stock investment decisions.