Hedge Funds Are Dumping Fluidigm Corporation (FLDM)

At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Fluidigm Corporation (NASDAQ:FLDM).

Is Fluidigm Corporation (NASDAQ:FLDM) undervalued? The best stock pickers are getting less bullish. The number of long hedge fund positions were cut by 2 in recent months. Our calculations also showed that FLDM 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.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

John Overdeck of Two Sigma

John Overdeck of Two Sigma Advisors

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, blockchain technology’s influence will go beyond online payments. So, we are checking out this futurist’s moonshot opportunities in tech stocks. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s check out the latest hedge fund action surrounding Fluidigm Corporation (NASDAQ:FLDM).

What does smart money think about Fluidigm Corporation (NASDAQ:FLDM)?

At the end of the first quarter, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -11% from the previous quarter. By comparison, 19 hedge funds held shares or bullish call options in FLDM a year ago. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).

Among these funds, Indaba Capital Management held the most valuable stake in Fluidigm Corporation (NASDAQ:FLDM), which was worth $9.7 million at the end of the third quarter. On the second spot was Levin Easterly Partners which amassed $9.4 million worth of shares. Renaissance Technologies, Partner Fund Management, and Two Sigma Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Indaba Capital Management allocated the biggest weight to Fluidigm Corporation (NASDAQ:FLDM), around 5.23% of its 13F portfolio. Partner Fund Management is also relatively very bullish on the stock, earmarking 0.56 percent of its 13F equity portfolio to FLDM.

Because Fluidigm Corporation (NASDAQ:FLDM) has witnessed falling interest from hedge fund managers, logic holds that there was a specific group of hedgies that decided to sell off their full holdings by the end of the first quarter. At the top of the heap, Anand Parekh’s Alyeska Investment Group dropped the largest investment of all the hedgies monitored by Insider Monkey, totaling close to $3.9 million in stock. Efrem Kamen’s fund, Pura Vida Investments, also said goodbye to its stock, about $3.8 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 2 funds by the end of the first quarter.

Let’s go over hedge fund activity in other stocks similar to Fluidigm Corporation (NASDAQ:FLDM). We will take a look at Galiano Gold Inc (NYSE:AKG), Bioceres Crop Solutions Corp. (NYSE:BIOX), Marinus Pharmaceuticals Inc (NASDAQ:MRNS), and Western New England Bancorp, Inc. (NASDAQ:WNEB). This group of stocks’ market values are closest to FLDM’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AKG 4 24151 -1
BIOX 3 343 0
MRNS 12 52863 -2
WNEB 5 16705 -1
Average 6 23516 -1

View table here if you experience formatting issues.

As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $24 million. That figure was $42 million in FLDM’s case. Marinus Pharmaceuticals Inc (NASDAQ:MRNS) is the most popular stock in this table. On the other hand Bioceres Crop Solutions Corp. (NYSE:BIOX) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Fluidigm Corporation (NASDAQ:FLDM) is more popular among hedge funds. 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 returned 13.3% in 2020 through June 25th but still managed to beat the market by 16.8 percentage points. Hedge funds were also right about betting on FLDM as the stock returned 39% so far in Q2 (through June 25th) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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