Does Fluidigm Corporation (NASDAQ:FLDM) represent a good buying opportunity at the moment? Let’s quickly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on satellite photos and other research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail inconceivably on some occasions, but net net their stock picks have been generating superior risk-adjusted returns on average over the years.
Fluidigm Corporation (NASDAQ:FLDM) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 19 hedge funds’ portfolios at the end of March. At the end of this article we will also compare FLDM to other stocks including MAG Silver Corporation (NYSE:MAG), Radius Health Inc (NASDAQ:RDUS), and Emerald Expositions Events, Inc. (NYSE:EEX) to get a better sense of its popularity.
Why do we pay any attention at all to hedge fund sentiment? 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 40 percentage points since May 2014 through May 30, 2019 (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 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to review the recent hedge fund action regarding Fluidigm Corporation (NASDAQ:FLDM).
Hedge fund activity in Fluidigm Corporation (NASDAQ:FLDM)
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 fourth quarter of 2018. By comparison, 9 hedge funds held shares or bullish call options in FLDM a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
Among these funds, Driehaus Capital held the most valuable stake in Fluidigm Corporation (NASDAQ:FLDM), which was worth $33.5 million at the end of the first quarter. On the second spot was Renaissance Technologies which amassed $28.6 million worth of shares. Moreover, Partner Fund Management, Millennium Management, and D E Shaw were also bullish on Fluidigm Corporation (NASDAQ:FLDM), allocating a large percentage of their portfolios to this stock.
Seeing as Fluidigm Corporation (NASDAQ:FLDM) has experienced falling interest from hedge fund managers, logic holds that there lies a certain “tier” of fund managers that decided to sell off their full holdings last quarter. Interestingly, Derek C. Schrier’s Indaba Capital Management cut the largest investment of the “upper crust” of funds monitored by Insider Monkey, worth about $58.4 million in stock. Christopher James’s fund, Partner Fund Management, also dumped its stock, about $34 million worth. These moves are interesting, 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 Fluidigm Corporation (NASDAQ:FLDM) but similarly valued. We will take a look at MAG Silver Corporation (NYSE:MAG), Radius Health Inc (NASDAQ:RDUS), Emerald Expositions Events, Inc. (NYSE:EEX), and Upland Software Inc (NASDAQ:UPLD). This group of stocks’ market values resemble FLDM’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MAG | 11 | 38491 | -3 |
| RDUS | 22 | 309498 | 4 |
| EEX | 6 | 5096 | -5 |
| UPLD | 28 | 170183 | 3 |
| Average | 16.75 | 130817 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.75 hedge funds with bullish positions and the average amount invested in these stocks was $131 million. That figure was $157 million in FLDM’s case. Upland Software Inc (NASDAQ:UPLD) is the most popular stock in this table. On the other hand Emerald Expositions Events, Inc. (NYSE:EEX) is the least popular one with only 6 bullish hedge fund positions. Fluidigm Corporation (NASDAQ:FLDM) is not the most popular stock in this group but hedge fund interest is still above average. 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 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately FLDM wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on FLDM were disappointed as the stock returned -2.6% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
