QLT Inc. (USA) (QLTI): Are Hedge Funds Right About This Stock?

Should investors bullish on QLT Inc. (USA) (NASDAQ:QLTI) consider the following data?

In the financial world, there are many indicators shareholders can use to analyze Mr. Market. A pair of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top investment managers can beat the S&P 500 by a solid margin (see just how much).

Just as necessary, bullish insider trading sentiment is a second way to analyze the marketplace. There are plenty of stimuli for an upper level exec to drop shares of his or her company, but only one, very simple reason why they would buy. Many empirical studies have demonstrated the useful potential of this tactic if piggybackers understand what to do (learn more here).

QLT Inc. (USA) (NASDAQ:QLTI)

Keeping this in mind, it’s important to discuss the recent info for QLT Inc. (USA) (NASDAQ:QLTI).

Hedge fund activity in QLT Inc. (USA) (NASDAQ:QLTI)

Heading into Q3, a total of 16 of the hedge funds we track held long positions in this stock, a change of -6% from the first quarter. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes significantly.

When using filings from the hedgies we track, Eliav Assouline and Marc Andersen’s Axial Capital had the biggest position in QLT Inc. (USA) (NASDAQ:QLTI), worth close to $38.9 million, comprising 6.9% of its total 13F portfolio. Coming in second is Michael Blitzer of Kingstown Capital Management, with a $13.8 million position; the fund has 2.3% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Matt Sirovich and Jeremy Mindich’s Scopia Capital, William Leland Edwards’s Palo Alto Investors and Julian Baker and Felix Baker’s Baker Bros. Advisors.

As QLT Inc. (USA) (NASDAQ:QLTI) has faced bearish sentiment from the entirety of the hedge funds we track, logic holds that there were a few funds who were dropping their full holdings in Q1. Interestingly, Samuel Isaly’s OrbiMed Advisors cut the biggest position of all the hedgies we watch, valued at close to $5.3 million in stock, and Ken Griffin of Citadel Investment Group was right behind this move, as the fund said goodbye to about $0.3 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 1 funds in Q1.

What do corporate executives and insiders think about QLT Inc. (USA) (NASDAQ:QLTI)?

Legal insider trading, particularly when it’s bullish, is best served when the company in focus has seen transactions within the past six months. Over the last 180-day time period, QLT Inc. (USA) (NASDAQ:QLTI) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to QLT Inc. (USA) (NASDAQ:QLTI). These stocks are Emergent Biosolutions Inc (NYSE:EBS), Sequenom, Inc. (NASDAQ:SQNM), Idenix Pharmaceuticals Inc (NASDAQ:IDIX), Dyax Corp. (NASDAQ:DYAX), and Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI). This group of stocks belong to the biotechnology industry and their market caps resemble QLTI’s market cap.