At Insider Monkey, we pore over the filings of nearly 750 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not LiqTech International Inc (NASDAQ:LIQT) makes for a good investment right now.
LiqTech International Inc (NASDAQ:LIQT) shareholders have witnessed an increase in activity from the world’s largest hedge funds in recent months. Our calculations also showed that LIQT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. 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 Russell 2000 ETFs by 40 percentage points since May 2014 (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 27.8% through November 21, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Clint Carlson of Carlson Capital
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s take a look at the latest hedge fund action regarding LiqTech International Inc (NASDAQ:LIQT).
What have hedge funds been doing with LiqTech International Inc (NASDAQ:LIQT)?
At the end of the third quarter, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of 60% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards LIQT over the last 17 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Diametric Capital was the largest shareholder of LiqTech International Inc (NASDAQ:LIQT), with a stake worth $2.4 million reported as of the end of September. Trailing Diametric Capital was Springbok Capital, which amassed a stake valued at $1.4 million. G2 Investment Partners Management, Carlson Capital, and Manatuck Hill Partners were 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 Diametric Capital allocated the biggest weight to LiqTech International Inc (NASDAQ:LIQT), around 2.01% of its 13F portfolio. Manatuck Hill Partners is also relatively very bullish on the stock, dishing out 0.43 percent of its 13F equity portfolio to LIQT.
With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Springbok Capital, managed by Gavin Saitowitz and Cisco J. del Valle, assembled the biggest position in LiqTech International Inc (NASDAQ:LIQT). Springbok Capital had $1.4 million invested in the company at the end of the quarter. Josh Goldberg’s G2 Investment Partners Management also made a $1.1 million investment in the stock during the quarter. The other funds with brand new LIQT positions are Clint Carlson’s Carlson Capital, David Harding’s Winton Capital Management, and Ken Griffin’s Citadel Investment Group.
Let’s check out hedge fund activity in other stocks similar to LiqTech International Inc (NYSE:LIQT). These stocks are Titan International Inc (NYSE:TWI), Tile Shop Holdings, Inc. (NASDAQ:TTS), TuanChe Limited (NASDAQ:TC), and Daseke, Inc. (NASDAQ:DSKE). This group of stocks’ market valuations match LIQT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TWI | 9 | 41210 | -1 |
| TTS | 10 | 7226 | -2 |
| TC | 1 | 34 | -1 |
| DSKE | 5 | 1251 | -2 |
| Average | 6.25 | 12430 | -1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.25 hedge funds with bullish positions and the average amount invested in these stocks was $12 million. That figure was $8 million in LIQT’s case. Tile Shop Holdings, Inc. (NASDAQ:TTS) is the most popular stock in this table. On the other hand TuanChe Limited (NASDAQ:TC) is the least popular one with only 1 bullish hedge fund positions. LiqTech International Inc (NYSE:LIQT) 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 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately LIQT wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on LIQT were disappointed as the stock returned -31.3% during the fourth quarter (through the end of November) 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 many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.