Is Flexion Therapeutics Inc (FLXN) A Good Stock To Buy?

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With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Driehaus Capital created the largest position in Flexion Therapeutics Inc (NASDAQ:FLXN). Marshall Wace LLP also initiated a $2 million position during the quarter. The other funds with brand new FLXN positions are Simon Sadler’s Segantii Capital, Jeffrey Jay and David Kroin’s Great Point Partners, and D. E. Shaw’s D E Shaw.

Let’s now take a look at hedge fund activity in other stocks similar to Flexion Therapeutics Inc (NASDAQ:FLXN). These stocks are Western Asset High Yield Defined Opportunity Fund Inc. (NYSE:HYI), Lionbridge Technologies, Inc. (NASDAQ:LIOX), Sorrentto Therapeutics Inc (NASDAQ:SRNE), and Amyris Inc (NASDAQ:AMRS). This group of stocks’ market values match FLXN’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HYI 4 34278 0
LIOX 16 57854 1
SRNE 13 58933 3
AMRS 4 4374 -1

As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $39 million, close to the $37 million figure in FLXN’s case. Lionbridge Technologies, Inc. (NASDAQ:LIOX) is the most popular stock in this table with a total of 16 funds reporting long positions, whole Western Asset High Yield Defined Opportunity Fund Inc. (NYSE:HYI) is the least popular one. Flexion Therapeutics Inc (NASDAQ:FLXN) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard LIOX might be a better candidate to consider a long position.

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