QLT Inc. (USA) (NASDAQ:QLTI) has experienced a decrease in support from the world’s most elite money managers lately.
To most investors, hedge funds are seen as slow, outdated financial vehicles of yesteryear. While there are greater than 8000 funds trading today, we look at the top tier of this club, close to 450 funds. It is widely believed that this group oversees the lion’s share of the hedge fund industry’s total asset base, and by keeping an eye on their best stock picks, we have deciphered a number of investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Just as important, positive insider trading activity is another way to parse down the world of equities. There are many stimuli for a bullish insider to drop shares of his or her company, but only one, very clear reason why they would buy. Various empirical studies have demonstrated the impressive potential of this tactic if “monkeys” know where to look (learn more here).
With these “truths” under our belt, we’re going to take a glance at the latest action surrounding QLT Inc. (USA) (NASDAQ:QLTI).
What have hedge funds been doing with QLT Inc. (USA) (NASDAQ:QLTI)?
At the end of the fourth quarter, a total of 16 of the hedge funds we track held long positions in this stock, a change of -16% from the previous quarter. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were boosting their holdings significantly.
According to our comprehensive database, Eliav Assouline and Marc Andersen’s Axial Capital had the most valuable position in QLT Inc. (USA) (NASDAQ:QLTI), worth close to $69.7 million, accounting for 8.7% of its total 13F portfolio. Sitting at the No. 2 spot is Kingstown Capital Management, managed by Michael Blitzer, which held a $23.6 million position; 4.7% of its 13F portfolio is allocated to the stock. Other hedgies that are bullish include William Leland Edwards’s Palo Alto Investors, Matt Sirovich and Jeremy Mindich’s Scopia Capital and Julian Baker and Felix Baker’s Baker Bros. Advisors.
Because QLT Inc. (USA) (NASDAQ:QLTI) has faced bearish sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of hedgies who sold off their entire stakes heading into 2013. Interestingly, SAC Subsidiary’s CR Intrinsic Investors dumped the biggest position of all the hedgies we watch, valued at an estimated $2.4 million in stock.. SAC Subsidiary’s fund, Sigma Capital Management, also dropped its stock, about $1.6 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 3 funds heading into 2013.
How have insiders been trading QLT Inc. (USA) (NASDAQ:QLTI)?
Insider buying is best served when the company in focus has seen transactions within the past half-year. Over the last half-year time frame, QLT Inc. (USA) (NASDAQ:QLTI) has seen zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity 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). All of these stocks are in the biotechnology industry and their market caps are closest to QLTI’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Emergent Biosolutions Inc (NYSE:EBS) | 17 | 0 | 1 |
| Sequenom, Inc. (NASDAQ:SQNM) | 15 | 2 | 0 |
| Idenix Pharmaceuticals Inc (NASDAQ:IDIX) | 17 | 0 | 0 |
| Dyax Corp. (NASDAQ:DYAX) | 11 | 0 | 3 |
| Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) | 13 | 1 | 2 |
With the results demonstrated by the aforementioned tactics, retail investors must always pay attention to hedge fund and insider trading sentiment, and QLT Inc. (USA) (NASDAQ:QLTI) is no exception.
