Hedge Funds Are Buying Quotient Ltd (QTNT)

Hedge funds are not perfect. They have their bad picks just like everyone else. Micron, a stock hedge funds have loved, lost 50% during the last 12 months ending in October 30. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% in the same time period, vs. a gain of 5.2% for the S&P 500 Index. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of Quotient Ltd (NASDAQ:QTNT).

Is Quotient Ltd (NASDAQ:QTNT) a healthy stock for your portfolio? Hedge funds are becoming hopeful. The number of long hedge fund bets advanced by 2 recently. On the contrary, the market was bearish on the stock of Quotient Ltd (NASDAQ:QTNT), losing 12.10% value throughout the quarter. This behavior prompted us to find out more about the hedge funds sharing interest in the company.

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 Hallmark Financial Services, Inc. (NASDAQ:HALL), Wi-LAN Inc – US listing (NASDAQ:WILN), and Horizon Bancorp (NASDAQ:HBNC) to gather more data points.

To most stock holders, hedge funds are viewed as unimportant, old investment vehicles of yesteryear. While there are more than 8000 funds with their doors open at the moment, we choose to focus on the elite of this group, about 700 funds. These money managers oversee bulk of all hedge funds’ total capital, and by observing their first-class stock picks, Insider Monkey has determined various investment strategies that have historically beaten the broader indices. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points per annum for a decade in their back tests.

Keeping this in mind, let’s take a glance at the latest action surrounding Quotient Ltd (NASDAQ:QTNT).

Hedge fund activity in Quotient Ltd (NASDAQ:QTNT)

At the end of the third quarter, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 29% from the previous quarter. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jacob Gottlieb’s Visium Asset Management has the largest position in Quotient Ltd (NASDAQ:QTNT), worth close to $21.7 million, comprising 0.3% of its total 13F portfolio. Coming in second is Michael Castor of Sio Capital, with a $16.7 million position; the fund has 11.4% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism include Bihua Chen’s Cormorant Asset Management, Legg Mason Capital Management, and Joseph Edelman’s Perceptive Advisors.

As aggregate interest increased, specific money managers were leading the bulls’ herd. Cormorant Asset Management, managed by Bihua Chen, initiated the most outsized position in Quotient Ltd (NASDAQ:QTNT). Cormorant Asset Management had $1.6 million invested in the company at the end of the quarter. Brian Taylor’s Pine River Capital Management also made a $0.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management, Perceptive Advisors, and Brian Taylor’s Pine River Capital Management.

Let’s now review hedge fund activity in other stocks similar to Quotient Ltd (NASDAQ:QTNT). We will take a look at Hallmark Financial Services, Inc. (NASDAQ:HALL), Wi-LAN Inc – US listing (NASDAQ:WILN), Horizon Bancorp (NASDAQ:HBNC), and XenoPort, Inc. (NASDAQ:XNPT). This group of stocks’ market valuations are closest to Quotient Ltd (NASDAQ:QTNT)’s market valuation.

As you can see, these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $28 million. That figure was $85 million in Quotient Ltd (NASDAQ:QTNT)’s case. XenoPort, Inc. (NASDAQ:XNPT) is the most popular stock in this table. On the other hand, Hallmark Financial Services, Inc. (NASDAQ:HALL) is the least popular one with only 4 bullish hedge fund positions. Quotient Ltd (NASDAQ:QTNT) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, XenoPort, Inc. (NASDAQ:XNPT) might be a better candidate to consider a long position.