Senomyx Inc. (SNMX): Are Hedge Funds Right About This Stock?

Seeing as Senomyx Inc. (NASDAQ:SNMX) has experienced a declination in interest from the entirety of the hedge funds we track, it’s easy to see that there lies a certain “tier” of fund managers who were dropping their full holdings last quarter. At the top of the heap, Phil Frohlich’s Prescott Group Capital Management cut the biggest stake of all the hedgies tracked by Insider Monkey, comprising close to $3.3 million in stock. Kerr Neilson’s fund, Platinum Asset Management, also dumped its stock, about $0.3 million worth of shares. These moves are interesting, as aggregate hedge fund interest was cut by 1 fund last quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Senomyx Inc. (NASDAQ:SNMX) but similarly valued. These stocks are CRA International, Inc. (NASDAQ:CRAI), Lifetime Brands Inc (NASDAQ:LCUT), Medgenics Inc (NYSEMKT:MDGN), and JAKKS Pacific, Inc. (NASDAQ:JAKK). This group of stocks’ market valuations match Senomyx Inc. (NASDAQ:SNMX)’s market valuation.

As you can see, these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $27 million. That figure was $30 million in Senomyx Inc. (NASDAQ:SNMX)’s case. JAKKS Pacific, Inc. (NASDAQ:JAKK) is the most popular stock in this table. On the other hand, Lifetime Brands Inc (NASDAQ:LCUT) is the least popular one with only 4 bullish hedge fund positions. Senomyx Inc. (NASDAQ:SNMX) 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, JAKKS Pacific, Inc. (NASDAQ:JAKK) might be a better candidate to consider a long position.