Is Loxo Oncology Inc (LOXO) Going to Burn These Hedge Funds?

Since Loxo Oncology Inc (NASDAQ:LOXO) has witnessed a slightly bearish sentiment from hedge fund managers, logic holds that there were a few money managers who were dropping their full holdings heading into Q4. Intriguingly, Anand Parekh’s Alyeska Investment Group cut the biggest investment of the “upper crust” of funds tracked by Insider Monkey, totaling an estimated $1.4 million in stock, and Israel Englander’s Millennium Management was right behind this move, as the fund sold off about $0.8 million worth of shares. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds heading into Q4.

Let’s now take a look at hedge fund activity in other stocks similar to Loxo Oncology Inc (NASDAQ:LOXO). We will take a look at BioDelivery Sciences International, Inc. (NASDAQ:BDSI), Seabridge Gold, Inc. (USA) (NYSE:SA), National Research Corp (NASDAQ:NRCIA), and Luxfer Holdings PLC (ADR) (NYSE:LXFR). All of these stocks’ market caps resemble LOXO’s market cap.

As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $45 million. That figure was $161 million in LOXO’s case. BioDelivery Sciences International, Inc. (NASDAQ:BDSI) is the most popular stock in this table. On the other hand National Research Corp (NASDAQ:NRCIA) is the least popular one with only 5 bullish hedge fund positions. Loxo Oncology Inc (NASDAQ:LOXO) 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 BDSI might be a better candidate to consider a long position.