Is Hudson Technologies, Inc. (HDSN) A Good Stock To Buy?

After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of March 31st. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Hudson Technologies, Inc. (NASDAQ:HDSN).

Is HDSN a good stock to buy? Hudson Technologies, Inc. (NASDAQ:HDSN) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 3 hedge funds’ portfolios at the end of the first quarter of 2021. Our calculations also showed that HDSN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). 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 Dare Bioscience, Inc. (NASDAQ:DARE), Hallmark Financial Services, Inc. (NASDAQ:HALL), and United-Guardian, Inc. (NASDAQ:UG) to gather more data points.

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. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Matthew Hulsizer of PEAK6 Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $26 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to take a gander at the recent hedge fund action surrounding Hudson Technologies, Inc. (NASDAQ:HDSN).

Do Hedge Funds Think HDSN Is A Good Stock To Buy Now?

At the end of March, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% 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 hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

Among these funds, Renaissance Technologies held the most valuable stake in Hudson Technologies, Inc. (NASDAQ:HDSN), which was worth $0.5 million at the end of the fourth quarter. On the second spot was PEAK6 Capital Management which amassed $0.1 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 Renaissance Technologies allocated the biggest weight to Hudson Technologies, Inc. (NASDAQ:HDSN), around 0.0006% of its 13F portfolio. PEAK6 Capital Management is also relatively very bullish on the stock, earmarking 0.0003 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: Royce & Associates. 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 only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was PEAK6 Capital Management).

Let’s check out hedge fund activity in other stocks similar to Hudson Technologies, Inc. (NASDAQ:HDSN). These stocks are Dare Bioscience, Inc. (NASDAQ:DARE), Hallmark Financial Services, Inc. (NASDAQ:HALL), United-Guardian, Inc. (NASDAQ:UG), IF Bancorp Inc (NASDAQ:IROQ), Datasea Inc. (NASDAQ:DTSS), ATIF Holdings Limited (NASDAQ:ATIF), and Senmiao Technology Limited (NASDAQ:AIHS). This group of stocks’ market valuations resemble HDSN’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 3.1 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $1 million in HDSN’s case. Hallmark Financial Services, Inc. (NASDAQ:HALL) is the most popular stock in this table. On the other hand Datasea Inc. (NASDAQ:DTSS) 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 overall hedge fund sentiment score for HDSN is 21.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. A small number of hedge funds were also right about betting on HDSN as the stock returned 73.9% since the end of the first quarter (through 6/11) and outperformed the market by an even larger margin.

Disclosure: None. This article was originally published at Insider Monkey.

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