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Is Quantenna Communications, Inc. (QTNA) Going to Burn These Hedge Funds?

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Quantenna Communications, Inc. (NASDAQ:QTNA).

Quantenna Communications, Inc. (NASDAQ:QTNA) investors should be aware of a decrease in support from the world’s most elite money managers recently. QTNA was in 16 hedge funds’ portfolios at the end of September. There were 17 hedge funds in our database with QTNA positions at the end of the previous quarter. Our calculations also showed that QTNA isn’t among the 30 most popular stocks among hedge funds.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (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 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Izzy Englander of MILLENNIUM MANAGEMENT

Let’s take a glance at the key hedge fund action regarding Quantenna Communications, Inc. (NASDAQ:QTNA).

Hedge fund activity in Quantenna Communications, Inc. (NASDAQ:QTNA)

Heading into the fourth quarter of 2018, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in QTNA over the last 13 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).

No of Hedge Funds QTNA Positions

Among these funds, Trigran Investments held the most valuable stake in Quantenna Communications, Inc. (NASDAQ:QTNA), which was worth $18.8 million at the end of the third quarter. On the second spot was Manatuck Hill Partners which amassed $7.1 million worth of shares. Moreover, Adage Capital Management, Lyon Street Capital, and Millennium Management were also bullish on Quantenna Communications, Inc. (NASDAQ:QTNA), allocating a large percentage of their portfolios to this stock.

Because Quantenna Communications, Inc. (NASDAQ:QTNA) has witnessed bearish sentiment from the smart money, it’s easy to see that there is a sect of money managers who were dropping their full holdings heading into Q3. Intriguingly, Joseph A. Jolson’s Harvest Capital Strategies sold off the largest stake of the 700 funds monitored by Insider Monkey, totaling close to $3.6 million in stock, and Dmitry Balyasny’s Balyasny Asset Management was right behind this move, as the fund dumped about $0.4 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 1 funds heading into Q3.

Let’s now review hedge fund activity in other stocks similar to Quantenna Communications, Inc. (NASDAQ:QTNA). These stocks are Templeton Dragon Fund, Inc. (NYSE:TDF), Gamco Investors Inc. (NYSE:GBL), Puxin Limited (NYSE:NEW), and Sientra Inc (NASDAQ:SIEN). This group of stocks’ market valuations are similar to QTNA’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TDF 1 242 -3
GBL 9 11152 0
NEW 5 16439 -3
SIEN 11 99022 -8
Average 6.5 31714 -3.5

View table here if you experience formatting issues.

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 $32 million. That figure was $59 million in QTNA’s case. Sientra Inc (NASDAQ:SIEN) is the most popular stock in this table. On the other hand Templeton Dragon Fund, Inc. (NYSE:TDF) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Quantenna Communications, Inc. (NASDAQ:QTNA) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

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

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