The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about Hudson Technologies, Inc. (NASDAQ:HDSN)?
Hudson Technologies, Inc. (NASDAQ:HDSN) shareholders have witnessed a decrease in enthusiasm from smart money of late. Our calculations also showed that HDSN 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.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 72% since March 2017 and outperformed the S&P 500 ETFs by more than 44 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Chuck Royce of Royce & Associates
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We interview hedge fund managers and ask them about their best ideas. You can watch our latest hedge fund manager interview here and find out the name of the large-cap healthcare stock that Sio Capital’s Michael Castor expects to double. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to check out the recent hedge fund action encompassing Hudson Technologies, Inc. (NASDAQ:HDSN).
What does smart money think about Hudson Technologies, Inc. (NASDAQ:HDSN)?
At the end of the first quarter, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of -25% from the previous quarter. On the other hand, there were a total of 3 hedge funds with a bullish position in HDSN a year ago. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
Among these funds, Winton Capital Management held the most valuable stake in Hudson Technologies, Inc. (NASDAQ:HDSN), which was worth $0.3 million at the end of the third quarter. On the second spot was Royce & Associates which amassed $0 million worth of shares. Citadel Investment Group was 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 Winton Capital Management allocated the biggest weight to Hudson Technologies, Inc. (NASDAQ:HDSN), around 0.01% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, designating 0.0005 percent of its 13F equity portfolio to HDSN.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Citadel Investment Group. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because none of the 750+ hedge funds tracked by Insider Monkey identified HDSN as a viable investment and initiated a position in the stock.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Hudson Technologies, Inc. (NASDAQ:HDSN) but similarly valued. We will take a look at inTEST Corporation (NASDAQ:INTT), Tuesday Morning Corporation (NASDAQ:TUES), MV Oil Trust (NYSE:MVO), and New Home Company Inc (NYSE:NWHM). This group of stocks’ market caps match HDSN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| INTT | 5 | 5695 | 1 |
| TUES | 4 | 1259 | -3 |
| MVO | 1 | 160 | 0 |
| NWHM | 8 | 2899 | 1 |
| Average | 4.5 | 2503 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 4.5 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $0 million in HDSN’s case. New Home Company Inc (NYSE:NWHM) is the most popular stock in this table. On the other hand MV Oil Trust (NYSE:MVO) is the least popular one with only 1 bullish hedge fund positions. Hudson Technologies, Inc. (NASDAQ:HDSN) is not the least popular stock in this group but hedge fund interest is still below average. 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 gained 7.9% in 2020 through May 22nd and still beat the market by 15.6 percentage points. A small number of hedge funds were also right about betting on HDSN as the stock returned 26.1% during the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
