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Do Hedge Funds Love Liquidia Technologies, Inc. (LQDA)?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of Liquidia Technologies, Inc. (NASDAQ:LQDA).

Is Liquidia Technologies, Inc. (NASDAQ:LQDA) going to take off soon? Hedge funds are selling. The number of long hedge fund bets went down by 1 in recent months. Our calculations also showed that LQDA isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.

Today there are a lot of signals stock market investors have at their disposal to grade their holdings. A couple of the most underrated signals are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the top picks of the top fund managers can outperform their index-focused peers by a superb amount (see the details here).

Ken Griffin

Ken Griffin of Citadel Investment Group

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s analyze the fresh hedge fund action surrounding Liquidia Technologies, Inc. (NASDAQ:LQDA).

How have hedgies been trading Liquidia Technologies, Inc. (NASDAQ:LQDA)?

At Q1’s end, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of -14% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in LQDA over the last 18 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is LQDA A Good Stock To Buy?

The largest stake in Liquidia Technologies, Inc. (NASDAQ:LQDA) was held by Great Point Partners, which reported holding $6 million worth of stock at the end of September. It was followed by Samsara BioCapital with a $4.8 million position. Other investors bullish on the company included Millennium Management, Eversept Partners, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Samsara BioCapital allocated the biggest weight to Liquidia Technologies, Inc. (NASDAQ:LQDA), around 2.75% of its 13F portfolio. Great Point Partners is also relatively very bullish on the stock, dishing out 0.63 percent of its 13F equity portfolio to LQDA.

Judging by the fact that Liquidia Technologies, Inc. (NASDAQ:LQDA) has faced bearish sentiment from the smart money, it’s safe to say that there is a sect of hedge funds who sold off their full holdings in the first quarter. It’s worth mentioning that Vishal Saluja and Pham Quang’s Endurant Capital Management dropped the biggest investment of the “upper crust” of funds tracked by Insider Monkey, worth close to $1.4 million in stock, and Renaissance Technologies was right behind this move, as the fund said goodbye to about $0.1 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds in the first quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Liquidia Technologies, Inc. (NASDAQ:LQDA) but similarly valued. These stocks are Horizon Technology Finance Corp (NASDAQ:HRZN), First Guaranty Bancshares, Inc. (NASDAQ:FGBI), Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA), and Tyme Technologies, Inc. (NASDAQ:TYME). This group of stocks’ market values are similar to LQDA’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HRZN 3 2998 -1
FGBI 1 557 0
LTRPA 21 37842 -2
TYME 4 2659 1
Average 7.25 11014 -0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 7.25 hedge funds with bullish positions and the average amount invested in these stocks was $11 million. That figure was $15 million in LQDA’s case. Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA) is the most popular stock in this table. On the other hand First Guaranty Bancshares, Inc. (NASDAQ:FGBI) is the least popular one with only 1 bullish hedge fund positions. Liquidia Technologies, Inc. (NASDAQ:LQDA) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th and still beat the market by 14.2 percentage points. A small number of hedge funds were also right about betting on LQDA as the stock returned 63.3% during the second quarter and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.