Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Quanterix Corporation (NASDAQ:QTRX) in this article.
Hedge fund interest in Quanterix Corporation (NASDAQ:QTRX) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that QTRX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare QTRX to other stocks including Axsome Therapeutics, Inc. (NASDAQ:AXSM), Heartland Financial USA Inc (NASDAQ:HTLF), and CSW Industrials, Inc. (NASDAQ:CSWI) to get a better sense of its popularity.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to take a look at the recent hedge fund action encompassing Quanterix Corporation (NASDAQ:QTRX).
Do Hedge Funds Think QTRX Is A Good Stock To Buy Now?
At Q1’s end, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards QTRX over the last 23 quarters. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
The largest stake in Quanterix Corporation (NASDAQ:QTRX) was held by Farallon Capital, which reported holding $35.1 million worth of stock at the end of December. It was followed by Platinum Asset Management with a $26.9 million position. Other investors bullish on the company included Driehaus Capital, Royce & Associates, and Redmile Group. In terms of the portfolio weights assigned to each position Sectoral Asset Management allocated the biggest weight to Quanterix Corporation (NASDAQ:QTRX), around 1.08% of its 13F portfolio. Parian Global Management is also relatively very bullish on the stock, designating 1.07 percent of its 13F equity portfolio to QTRX.
Because Quanterix Corporation (NASDAQ:QTRX) has witnessed falling interest from the entirety of the hedge funds we track, logic holds that there is a sect of fund managers that elected to cut their entire stakes last quarter. Intriguingly, Paul Marshall and Ian Wace’s Marshall Wace LLP cut the largest position of all the hedgies watched by Insider Monkey, totaling about $50.1 million in stock. Israel Englander’s fund, Millennium Management, also dumped its stock, about $12.8 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Quanterix Corporation (NASDAQ:QTRX) but similarly valued. These stocks are Axsome Therapeutics, Inc. (NASDAQ:AXSM), Heartland Financial USA Inc (NASDAQ:HTLF), CSW Industrials, Inc. (NASDAQ:CSWI), Purple Innovation, Inc. (NASDAQ:PRPL), Criteo SA (NASDAQ:CRTO), Park National Corporation (NYSE:PRK), and FB Financial Corporation (NYSE:FBK). This group of stocks’ market valuations match QTRX’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.9 hedge funds with bullish positions and the average amount invested in these stocks was $202 million. That figure was $178 million in QTRX’s case. Purple Innovation, Inc. (NASDAQ:PRPL) is the most popular stock in this table. On the other hand Park National Corporation (NYSE:PRK) is the least popular one with only 5 bullish hedge fund positions. Quanterix Corporation (NASDAQ:QTRX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for QTRX is 71.8. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and beat the market again by 7.7 percentage points. Unfortunately QTRX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on QTRX were disappointed as the stock returned -11.6% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.