Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Is Zafgen Inc (ZFGN) A Good Stock To Buy?

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30th, so let’s proceed with the discussion of the hedge fund sentiment on Zafgen Inc (NASDAQ:ZFGN).

pharmacist, worker, shelves, business, counter, glasses, attractive, medical, competence, chemist, adult, clinic, drugstore, selling, female, consultation, medicine, coat


Is Zafgen Inc a buy right now? The best stock pickers are getting more optimistic. The number of long hedge fund bets rose by 2 lately. At the end of this article we will also compare ZFGN to other stocks including PharMerica Corporation (NYSE:PMC), Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW), and HudBay Minerals Inc Ord Shs (NYSE:HBM) to determine whether the increase in hedge fund activity is meaningful.

Follow Zafgen Inc. (NASDAQ:ZFGN)
Trade (NASDAQ:ZFGN) Now!

In the 21st century investor’s toolkit there are tons of tools stock traders use toassess their stock investments. We believe a duo of the most useful tools are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the best picks of the best hedge fund managers can outclass the market by a superb margin (see the details here).

With all of this in mind, let’s view the recent action regarding Zafgen Inc (NASDAQ:ZFGN).

What have hedge funds been doing with Zafgen Inc (NASDAQ:ZFGN)?

At Q3’s end, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their stakes significantly.

James E. Flynn’s Deerfield Management had the biggest position in Zafgen Inc (NASDAQ:ZFGN), worth close to $17.7 million, comprising 0.7% of its total 13F portfolio. On Deerfield Management’s heels is VHCP Management, led by Anders Hove and Bong Koh, holding a $17.3 million position; the fund has 4.4% of its 13F portfolio invested in the stock. Other members of the smart money with similar optimism include Jason Karp’s Tourbillon Capital Partners, Julian Baker and Felix Baker’s Baker Bros. Advisors and Farallon Capital.

With a general bullishness amongst the heavyweights, specific money managers were breaking ground themselves. Tourbillon Capital Partners, managed by Jason Karp, initiated the largest position in Zafgen Inc (NASDAQ:ZFGN). Tourbillon Capital Partners had $14.7 million invested in the company at the end of the quarter. Ken Greenberg and David Kim’s Ghost Tree Capital also made a $2.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Cliff Asness’s AQR Capital Management, Dmitry Balyasny’s Balyasny Asset Management, and Stuart Weisbrod’s Iguana Healthcare Management.

Let’s now review hedge fund activity in other stocks similar to Zafgen Inc (NASDAQ:ZFGN). These stocks are PharMerica Corporation (NYSE:PMC), Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW), HudBay Minerals Inc Ord Shs (NYSE:HBM), and StoneMor Partners L.P. (NYSE:STON). This group of stocks’ market values resemble ZFGN’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PMC 23 86046 5
AAWW 22 93520 -4
HBM 7 3215 -4
STON 5 4517 0

As you can see these stocks had an average of 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $47 million. PharMerica Corporation (NYSE:PMC) is the most popular stock in this table. On the other hand StoneMor Partners L.P. (NYSE:STON) is the least popular one with only 5 bullish hedge fund positions. Zafgen Inc (NASDAQ:ZFGN) 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 and already have large presence. In this regard STON might be a better candidate to consider a long position.

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!