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Hedge Fund Ownership

Under the micro-scope: Which shares are trading?

July 1, 2021

(This is the first in what is intended to be an irregular series about micro-cap stocks that have attracted hedge fund interest.)

While the hedge fund universe includes more than a thousand each of large- mid- and small-cap stocks, there are only 171 names on the micro-cap list. While some of these barely trade at all, some have rather excessive patterns as measured by the HFU's percentage of average daily volumes. For companies in which hedge funds own the largest proportion, this can be a stratospheric  number.

Take for example publisher Postmedia Network (OTC:PCDAF), two-thirds owned by Chatham Asset Management. The HFU's proportion of its ADV is 17.8 million percent. That's an order of magnitude higher than the 2.3 million percent of Indonesian insurer Asuransi MAG, controlled by Fairfax Financial. The HFU percentage of ADV is greater than 100,000% for five other micro-caps. The median figure for micro-caps is around 6,000% and for small caps around 2,000%.