Is MannKind Corporation (MNKD) Going to Burn These Hedge Funds?

Since MannKind Corporation (NASDAQ:MNKD) has faced bearish sentiment from hedge fund managers, it’s easy to see that there exists a select few funds who were dropping their positions entirely by the end of the third quarter. Intriguingly, Kenneth Tropin’s Graham Capital Management dumped the biggest stake of the 700 funds monitored by Insider Monkey, comprising about $22.1 million in stock. Carl Goldsmith and Scott Klein’s fund, Beach Point Capital Management, also cut its stock, about $6.9 million worth. These transactions are important to note, as total hedge fund interest fell by 2 funds by the end of the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to MannKind Corporation (NASDAQ:MNKD). These stocks are G&K Services Inc (NASDAQ:GK), Main Street Capital Corporation (NYSE:MAIN), Teekay Offshore Partners L.P. (NYSE:TOO), and Kindred Healthcare, Inc. (NYSE:KND). This group of stocks’ market valuations resemble MNKD’s market valuation.

As you can see these stocks had an average of 14.5 hedge funds with bullish positions and the average amount invested in these stocks was $132 million, significantly higher than the $44 million figure in MNKD’s case. Kindred Healthcare, Inc. (NYSE:KND) is the most popular stock in this table. On the other hand Teekay Offshore Partners L.P. (NYSE:TOO) is the least popular one with only 6 bullish hedge fund positions. MannKind Corporation (NASDAQ:MNKD) 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 KND might be a better candidate to consider a long position.