Is Endologix, Inc. (ELGX) A Good Stock To Buy Right Now?

Seeing as Endologix, Inc. (NASDAQ:ELGX) has experienced declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there lies a certain “tier” of money managers who sold off their positions entirely in the third quarter. It’s worth mentioning that Efrem Kamen’s Pura Vida Investments said goodbye to the largest position of all the hedgies tracked by Insider Monkey, totaling an estimated $2.6 million in stock. James Dondero’s fund, Highland Capital Management, also dropped its stock, about $2.3 million worth.

Let’s now take a look at hedge fund activity in other stocks similar to Endologix, Inc. (NASDAQ:ELGX). We will take a look at PennyMac Mortgage Investment Trust (NYSE:PMT), Fortuna Silver Mines Inc. (NYSE:FSM), Aerie Pharmaceuticals Inc (NASDAQ:AERI), and James River Group Holdings Ltd (NASDAQ:JRVR). All of these stocks’ market caps are similar to ELGX’s market cap.

As you can see these stocks had an average of 16.75 hedge funds with bullish positions and the average amount invested in these stocks was $250 million. That figure was $194 million in ELGX’s case. Aerie Pharmaceuticals Inc (NASDAQ:AERI) is the most popular stock in this table. On the other hand Fortuna Silver Mines Inc. (NYSE:FSM) is the least popular one with only 11 bullish hedge fund positions. Endologix, Inc. (NASDAQ:ELGX) 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 AERI might be a better candidate to consider taking a long position in.

ELGX shares have retraced since late October due to broader market weakness and the news that Dr. Matthew Thompson will replace Dr. David Deaton as the Chief Medical Officer effective December. Shares also fell when the company reported its third quarter results, with ELGX losing $0.18 per share versus Wall Street’s estimate of a loss of $0.15 per share. Management narrowed full year 2016 revenue guidance to $198-$201 million from the previous $197-$203 million. Analysts have a price target of $13.95 per share.