Is KemPharm Inc (KMPH) A Good Stock To Buy?

Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.

Let’s now take a look at hedge fund activity in other stocks similar to KemPharm Inc (NASDAQ:KMPH). We will take a look at Profire Energy, Inc. (NASDAQ:PFIE), Tenax Therapeutics Inc (NASDAQ:TENX), OHA Investment Corp (NASDAQ:OHAI), and MEI Pharma Inc (NASDAQ:MEIP). This group of stocks’ market valuations are similar to KMPH’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 $8 million. That figure was $13 million in KMPH’s case. Tenax Therapeutics Inc (NASDAQ:TENX) is the most popular stock in this table. On the other hand Profire Energy, Inc. (NASDAQ:PFIE) is the least popular one with only 4 bullish hedge fund positions. KemPharm Inc (NASDAQ:KMPH) 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 TENX might be a better candidate to consider taking a long position in.

Disclosure: None