The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded Fluidigm Corporation (NASDAQ:FLDM) and determine whether the smart money was really smart about this stock.
Is Fluidigm Corporation (NASDAQ:FLDM) an attractive investment right now? Prominent investors were becoming hopeful. The number of bullish hedge fund bets advanced by 4 in recent months. Fluidigm Corporation (NASDAQ:FLDM) was in 20 hedge funds’ portfolios at the end of June. The all time high for this statistics is 21. Our calculations also showed that FLDM isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). There were 16 hedge funds in our database with FLDM holdings at the end of March.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 56 percentage points since March 2017 (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 34% through August 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Samuel Isaly of OrbiMed Advisors
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we are checking out this junior gold mining stock and we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. Now we’re going to check out the recent hedge fund action surrounding Fluidigm Corporation (NASDAQ:FLDM).
How have hedgies been trading Fluidigm Corporation (NASDAQ:FLDM)?
At the end of the second quarter, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in FLDM over the last 20 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Among these funds, Indaba Capital Management held the most valuable stake in Fluidigm Corporation (NASDAQ:FLDM), which was worth $15.9 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $13.5 million worth of shares. OrbiMed Advisors, Partner Fund Management, and Millennium Management 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 Indaba Capital Management allocated the biggest weight to Fluidigm Corporation (NASDAQ:FLDM), around 6.02% of its 13F portfolio. DG Capital Management is also relatively very bullish on the stock, setting aside 0.77 percent of its 13F equity portfolio to FLDM.
As industrywide interest jumped, some big names were breaking ground themselves. OrbiMed Advisors, managed by Samuel Isaly, initiated the most valuable position in Fluidigm Corporation (NASDAQ:FLDM). OrbiMed Advisors had $11.7 million invested in the company at the end of the quarter. Efrem Kamen’s Pura Vida Investments also initiated a $3.4 million position during the quarter. The other funds with brand new FLDM positions are Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Kamran Moghtaderi’s Eversept Partners, and Steve Cohen’s Point72 Asset Management.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Fluidigm Corporation (NASDAQ:FLDM) but similarly valued. These stocks are Enterprise Bancorp, Inc (NASDAQ:EBTC), Donnelley Financial Solutions, Inc. (NYSE:DFIN), Baytex Energy Corp (NYSE:BTE), ChromaDex Corporation (NASDAQ:CDXC), Peabody Energy Corporation (NYSE:BTU), Trilogy Metals Inc. (NYSE:TMQ), and GameStop Corp. (NYSE:GME). This group of stocks’ market valuations resemble FLDM’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EBTC | 1 | 1017 | 0 |
| DFIN | 23 | 48862 | 5 |
| BTE | 6 | 4658 | 0 |
| CDXC | 6 | 1900 | 3 |
| BTU | 23 | 124510 | -2 |
| TMQ | 7 | 62854 | 0 |
| GME | 19 | 43267 | 2 |
| Average | 12.1 | 41010 | 1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.1 hedge funds with bullish positions and the average amount invested in these stocks was $41 million. That figure was $80 million in FLDM’s case. Donnelley Financial Solutions, Inc. (NYSE:DFIN) is the most popular stock in this table. On the other hand Enterprise Bancorp, Inc (NASDAQ:EBTC) is the least popular one with only 1 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. Our overall hedge fund sentiment score for FLDM is 80.8. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 24.8% in 2020 through the end of third quarter and still beat the market by 19.3 percentage points. Hedge funds were also right about betting on FLDM as the stock returned 85.3% during Q3 and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
