Should You Avoid Transenterix Inc (TRXC)?

Judging by the fact that Transenterix Inc (NYSEMKT:TRXC) has witnessed declining sentiment from the aggregate hedge fund industry, we can see that there exists a select few fund managers who sold off their full holdings last quarter. It’s worth mentioning that Anand Parekh’s Alyeska Investment Group dropped the biggest stake of the “upper crust” of funds monitored by Insider Monkey, worth an estimated $1.1 million in stock. Benjamin A. Smith’s fund, Laurion Capital Management, also dropped its stock, about $0.2 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds last quarter.

Let’s check out hedge fund activity in other stocks similar to Transenterix Inc (NYSEMKT:TRXC). We will take a look at POZEN Inc. (NASDAQ:POZN), TransGlobe Energy Corporation (USA) (NASDAQ:TGA), Primo Water Corporation (NASDAQ:PRMW), and Inotek Pharmaceuticals Corp (NASDAQ:ITEK). This group of stocks’ market valuations are closest to TRXC’s market valuation.

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 $33 million. That figure was $50 million in TRXC’s case. POZEN Inc. (NASDAQ:POZN) is the most popular stock in this table. On the other hand TransGlobe Energy Corporation (USA) (NASDAQ:TGA) is the least popular one with only 5 bullish hedge fund positions. Transenterix Inc (NYSEMKT:TRXC) 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 POZN might be a better candidate to consider a long position.