Are Hedge Funds Betting On RedHill Biopharma Ltd – ADR (RDHL)?

As industrywide interest jumped, specific money managers have jumped into RedHill Biopharma Ltd – ADR (NASDAQ:RDHL) headfirst. Visium Asset Managemen assembled the biggest position in RedHill Biopharma Ltd – ADR (NASDAQ:RDHL). Visium Asset Management had $6.5 million invested in the company at the end of the quarter. Sabby Capital also made a $2.2 million investment in the stock during the quarter. The only other fund with a brand new RDHL position is Millennium Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as RedHill Biopharma Ltd – ADR (NASDAQ:RDHL) but similarly valued. These stocks are Capstone Turbine Corporation (NASDAQ:CPST), Energy Recovery, Inc. (NASDAQ:ERII), ContraFect Corp (NASDAQ:CFRX), and Advent/Claymore Enhanced Growth & Income (NYSE:LCM). This group of stocks’ market caps match RDHL’s market cap.

As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $5 million, significantly below the $27 million figure in RDHL’s case. Capstone Turbine Corporation (NASDAQ:CPST) is the most popular stock in this table with seven funds holding shares, while Energy Recovery, Inc. (NASDAQ:ERII) is the least popular one. RedHill Biopharma Ltd – ADR (NASDAQ:RDHL) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard CPST might be a better candidate to consider a long position.