Concerns over a shift in Fed’s easy monetary policy have hit several hedge funds hard during the third quarter. A number of sectors are in correction territory. More importantly, Russell 2000 ETF (IWM) underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points between June 25, 2015 and October 30, 2015. Hedge funds and institutional investors tracked by Insider Monkey usually invest a disproportionate amount of their portfolios in smaller cap stocks. We have been receiving indications that hedge funds were paring back their overall exposure and this is one of the factors behind the recent movements in major indices. In this article, we will take a closer look at hedge fund sentiment towards LiqTech International Inc (NYSEMKT:LIQT).
LiqTech International Inc (NYSEMKT:LIQT) has experienced an increase in support from the world’s most elite money managers lately. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Nuverra Environmental Solutions Inc (NYSE:NES), Penn Virginia Corporation (NYSE:PVA), and ImmunoCellular Therapeutics Ltd (NYSEAMEX:IMUC) to gather more data points.
To most investors, hedge funds are viewed as underperforming, old financial tools of the past. While there are over 8000 funds trading at present, We hone in on the masters of this club, about 700 funds. These money managers orchestrate most of the smart money’s total capital, and by paying attention to their finest stock picks, Insider Monkey has formulated various investment strategies that have historically surpassed the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points per year for a decade in their back tests.
Keeping this in mind, we’re going to take a look at the latest action regarding LiqTech International Inc (NYSEMKT:LIQT).
How are hedge funds trading LiqTech International Inc (NYSEMKT:LIQT)?
Heading into Q4, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Mark Coe’s Coe Capital Management has the biggest position in LiqTech International Inc (NYSEMKT:LIQT), worth close to $0.4 million, amounting to 0.2% of its total 13F portfolio. The second most bullish fund manager is Jonathan Barrett and Paul Segal of Luminus Management, with a $0.4 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Ken Griffin’s Citadel Investment Group also made a $0 million investment in the stock during the quarter. Another professional money manager that holds long position is Bernard Selz’s Selz Capital.
On the next page, we analyze hedge fund activity of similarly priced stocks to get a better feel on what the elite funds think of LiqTech International Inc (NYSEMKT:LIQT).
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as LiqTech International Inc (NYSEMKT:LIQT) but similarly valued. These stocks are Nuverra Environmental Solutions Inc (NYSE:NES), Penn Virginia Corporation (NYSE:PVA), ImmunoCellular Therapeutics Ltd (NYSEAMEX:IMUC), and Rand Logistics, Inc. (NASDAQ:RLOG). All of these stocks’ market caps resemble LIQT’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 6.5 hedge funds with bullish positions and the average amount invested in these stocks was $5 million. That figure was $1 million in LIQT’s case. Penn Virginia Corporation (NYSE:PVA) is the most popular stock in this table. On the other hand Nuverra Environmental Solutions Inc (NYSE:NES) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks LiqTech International Inc (NYSEMKT:LIQT) is even less popular than NES. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.