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Where Do Hedge Funds Stand On Quanterix Corporation (QTRX)?

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·6 min read
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As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds' thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Quanterix Corporation (NASDAQ:QTRX).

Quanterix Corporation (NASDAQ:QTRX) shareholders have witnessed an increase in support from the world's most elite money managers of late. Quanterix Corporation (NASDAQ:QTRX) was in 20 hedge funds' portfolios at the end of June. The all time high for this statistic was previously 19. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 19 hedge funds in our database with QTRX positions at the end of the first quarter. Our calculations also showed that QTRX isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

Kerr Neilson of Platinum Asset Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV 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 let's view the latest hedge fund action encompassing Quanterix Corporation (NASDAQ:QTRX).

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

At the end of June, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 5% from one quarter earlier. By comparison, 8 hedge funds held shares or bullish call options in QTRX a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).

Is QTRX A Good Stock To Buy?
Is QTRX A Good Stock To Buy?

Among these funds, Marshall Wace LLP held the most valuable stake in Quanterix Corporation (NASDAQ:QTRX), which was worth $83 million at the end of the second quarter. On the second spot was Millennium Management which amassed $36.7 million worth of shares. Farallon Capital, Platinum Asset Management, and Pura Vida Investments 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 Bridger Management allocated the biggest weight to Quanterix Corporation (NASDAQ:QTRX), around 0.7% of its 13F portfolio. Platinum Asset Management is also relatively very bullish on the stock, earmarking 0.7 percent of its 13F equity portfolio to QTRX.

Consequently, key money managers have been driving this bullishness. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, created the most outsized position in Quanterix Corporation (NASDAQ:QTRX). Marshall Wace LLP had $83 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also made a $36.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Efrem Kamen's Pura Vida Investments, Richard SchimeláandáLawrence Sapanski's Cinctive Capital Management, and Thomas Bailard's Bailard Inc.

Let's now take a look at hedge fund activity in other stocks similar to Quanterix Corporation (NASDAQ:QTRX). We will take a look at Organogenesis Holdings Inc. (NASDAQ:ORGO), Whiting Petroleum Corporation (NYSE:WLL), Protagonist Therapeutics, Inc. (NASDAQ:PTGX), Monro Inc (NASDAQ:MNRO), Hostess Brands, Inc. (NASDAQ:TWNK), Virtus Investment Partners Inc (NASDAQ:VRTS), and B&G Foods, Inc. (NYSE:BGS). This group of stocks' market caps match QTRX's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ORGO,16,205787,4 WLL,24,283386,3 PTGX,27,723557,7 MNRO,10,25340,-2 TWNK,32,438884,-2 VRTS,21,165409,1 BGS,10,10330,0 Average,20,264670,1.6 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $265 million. That figure was $280 million in QTRX's case. Hostess Brands, Inc. (NASDAQ:TWNK) is the most popular stock in this table. On the other hand Monro Inc (NASDAQ:MNRO) is the least popular one with only 10 bullish hedge fund positions. Quanterix Corporation (NASDAQ:QTRX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for QTRX is 58.7. 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. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. 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 24% in 2021 through October 22nd and surpassed the market again by 1.6 percentage points. Unfortunately QTRX wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); QTRX investors were disappointed as the stock returned -14.4% since the end of June (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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