Should You Avoid Flexion Therapeutics Inc (FLXN)?

Since Flexion Therapeutics Inc (NASDAQ:FLXN) has encountered a decline in interest from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of hedgies who sold off their positions entirely heading into Q4. At the top of the heap, Phill Gross and Robert Atchinson’s Adage Capital Management said goodbye to the biggest stake of the 700 funds monitored by Insider Monkey, comprising close to $1.1 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund cut about $0.9 million worth of shares.

Let’s now take a look at hedge fund activity in other stocks similar to Flexion Therapeutics Inc (NASDAQ:FLXN). We will take a look at Alon USA Partners LP (NYSE:ALDW), Motorcar Parts of America, Inc. (NASDAQ:MPAA), Sabine Royalty Trust (NYSE:SBR), and MDC Partners Inc. (USA) (NASDAQ:MDCA). This group of stocks’ market values are similar to FLXN’s market value.

As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $46 million. That figure was $40 million in FLXN’s case. MDC Partners Inc. (USA) (NASDAQ:MDCA) is the most popular stock in this table. On the other hand Alon USA Partners LP (NYSE:ALDW) is the least popular one with only 4 bullish hedge fund positions. Flexion Therapeutics Inc (NASDAQ:FLXN) 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 MDCA might be a better candidate to consider taking a long position in.

Disclosure: None