Liquidity Services, Inc. (LQDT): Are Hedge Funds Right About This Stock?: Vitacost.com, Inc. (VITC), Overstock.com, Inc. (OSTK)

Liquidity Services, Inc. (NASDAQ:LQDT) shareholders have witnessed a decrease in activity from the world’s largest hedge funds of late.

To the average investor, there are dozens of indicators shareholders can use to monitor Mr. Market. A pair of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top money managers can outclass the market by a very impressive margin (see just how much).

Equally as integral, optimistic insider trading sentiment is another way to parse down the investments you’re interested in. As the old adage goes: there are lots of motivations for a corporate insider to cut shares of his or her company, but only one, very clear reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the useful potential of this strategy if piggybackers know what to do (learn more here).

Now, we’re going to take a glance at the latest action regarding Liquidity Services, Inc. (NASDAQ:LQDT).

What does the smart money think about Liquidity Services, Inc. (NASDAQ:LQDT)?

At year’s end, a total of 11 of the hedge funds we track were bullish in this stock, a change of -21% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their holdings substantially.

Of the funds we track, Lee Ainslie’s Maverick Capital had the most valuable position in Liquidity Services, Inc. (NASDAQ:LQDT), worth close to $104.2 million, accounting for 1.5% of its total 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, managed by Jim Simons, which held a $14.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include Amy Minella’s Cardinal Capital, Joseph A. Jolson’s Harvest Capital Strategies and Ric Dillon’s Diamond Hill Capital.

Due to the fact that Liquidity Services, Inc. (NASDAQ:LQDT) has faced falling interest from the smart money, logic holds that there was a specific group of fund managers who were dropping their entire stakes last quarter. Interestingly, Donald Chiboucis’s Columbus Circle Investors said goodbye to the biggest position of the 450+ funds we key on, comprising close to $51 million in stock., and Philippe Laffont of Coatue Management was right behind this move, as the fund cut about $45.2 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 3 funds last quarter.

What have insiders been doing with Liquidity Services, Inc. (NASDAQ:LQDT)?

Insider trading activity, especially when it’s bullish, is at its handiest when the primary stock in question has experienced transactions within the past 180 days. Over the latest half-year time period, Liquidity Services, Inc. (NASDAQ:LQDT) has seen zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Liquidity Services, Inc. (NASDAQ:LQDT). These stocks are Vitacost.com, Inc. (NASDAQ:VITC), Overstock.com, Inc. (NASDAQ:OSTK), E Commerce China Dangdang Inc (ADR) (NYSE:DANG), Stamps.com Inc. (NASDAQ:STMP), and PC Connection, Inc. (NASDAQ:PCCC). All of these stocks are in the catalog & mail order houses industry and their market caps are closest to LQDT’s market cap.

With the results exhibited by Insider Monkey’s time-tested strategies, retail investors should always keep an eye on hedge fund and insider trading activity, and Liquidity Services, Inc. (NASDAQ:LQDT) shareholders fit into this picture quite nicely.

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