Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Flamel Technologies S.A. (ADR) (NASDAQ:FLML) has experienced an increase in activity from the world’s largest hedge funds recently. FLML was in 16 hedge funds’ portfolios at the end of September. There were 13 hedge funds in our database with FLML positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Ladenburg Thalmann Financial Services (NYSEAMEX:LTS), Camden National Corporation (NASDAQ:CAC), and Pier 1 Imports, Inc. (NYSE:PIR) to gather more data points.
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How have hedgies been trading Flamel Technologies S.A. (ADR) (NASDAQ:FLML)?
At the end of the third quarter, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a rise of 23% from one quarter earlier. By comparison, 14 hedge funds held shares or bullish call options in FLML heading into this year. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Kevin Kotler’s Broadfin Capital has the largest position in Flamel Technologies S.A. (ADR) (NASDAQ:FLML), worth close to $54.5 million, amounting to 4.9% of its total 13F portfolio. Coming in second is Deerfield Management, led by James E. Flynn, which holds a $50.5 million position; the fund has 2.3% of its 13F portfolio invested in the stock. Remaining professional money managers with similar optimism consist of George McCabe’s Portolan Capital Management, and Steven Boyd’s Armistice Capital. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
As one would reasonably expect, specific money managers have jumped into Flamel Technologies S.A. (ADR) (NASDAQ:FLML) headfirst. Perceptive Advisors, led by Joseph Edelman, created the most outsized position in Flamel Technologies S.A. (ADR) (NASDAQ:FLML). Perceptive Advisors had $16.9 million invested in the company at the end of the quarter. Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital also made a $0.3 million investment in the stock during the quarter. The following funds were also among the new FLML investors: Mike Vranos’ Ellington and Ken Griffin’s Citadel Investment Group.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Flamel Technologies S.A. (ADR) (NASDAQ:FLML) but similarly valued. We will take a look at Ladenburg Thalmann Financial Services (NYSEAMEX:LTS), Camden National Corporation (NASDAQ:CAC), Pier 1 Imports, Inc. (NYSE:PIR), and Siliconware Precision Industries (ADR) (NASDAQ:SPIL). This group of stocks’ market caps are closest to FLML’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LTS | 6 | 1728 | 1 |
| CAC | 6 | 66695 | 0 |
| PIR | 18 | 77201 | -4 |
| SPIL | 6 | 16403 | 1 |
As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $41 million. That figure was $163 million in FLML’s case. Pier 1 Imports, Inc. (NYSE:PIR) is the most popular stock in this table. On the other hand Ladenburg Thalmann Financial Services (NYSEAMEX:LTS) is the least popular one with only 6 bullish hedge fund positions. Flamel Technologies S.A. (ADR) (NASDAQ:FLML) 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. In this regard PIR might be a better candidate to consider taking a long position in.
Disclosure: None
