Do Hedge Funds Love IRIDEX Corporation (IRIX)?

With a general bullishness amongst the heavyweights, key money managers have jumped into IRIDEX Corporation (NASDAQ:IRIX) headfirst. Craig Drill Capital established the most valuable position in IRIDEX Corporation (NASDAQ:IRIX). Craig Drill Capital had $0.4 million invested in the company at the end of the quarter. Chao Ku’s Nine Chapters Capital Management also made a $0.1 million investment in the stock during the quarter.

Let’s go over hedge fund activity in other stocks similar to IRIDEX Corporation (NASDAQ:IRIX). These stocks are Approach Resources Inc. (NASDAQ:AREX), First South Bancorp, Inc. (NASDAQ:FSBK), Magnum Hunter Resources Corp (NYSE:MHR), and Key Technology, Inc. (NASDAQ:KTEC). This group of stocks’ market valuations match IRIX’s market valuation.

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 $9 million. That figure was just $3 million in IRIX’s case. Magnum Hunter Resources Corp (NYSE:MHR) is the most popular stock in this table. On the other hand Approach Resources Inc. (NASDAQ:AREX) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks IRIDEX Corporation (NASDAQ:IRIX) is even less popular than AREX. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.