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Do Hedge Funds Love AEterna Zentaris Inc. (USA) (AEZS)?

With a general bullishness amongst the heavyweights, specific money managers have jumped into AEterna Zentaris Inc. (USA) (NASDAQ:AEZS) headfirst. Ken Griffin’s Citadel Investment Group initiated a $0.1 million position during the quarter. The only other fund with a brand new AEterna Zentaris Inc. (USA) (NASDAQ:AEZS) position is Two Sigma Advisors.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as AEterna Zentaris Inc. (USA) (NASDAQ:AEZS) but similarly valued. We will take a look at EnteroMedics Inc (NASDAQ:ETRM), Biodel Inc (NASDAQ:BIOD), Rubicon Technology, Inc. (NASDAQ:RBCN), and Echelon Corporation (NASDAQ:ELON). This group of stocks’ market caps is closest to AEterna Zentaris Inc. (USA) (NASDAQ:AEZS)’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ETRM 5 809 -1
BIOD 8 6239 -1
RBCN 5 8457 -2
ELON 4 3549 -1

As you can see, these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $5 million. That figure was $1 million in AEZS’s case. Biodel Inc (NASDAQ:BIOD) is on top of the popularity list with 8 hedge fund holdings, whereas Echelon Corporation (NASDAQ:ELON) is the least popular one with only 4 bullish hedge fund positions. AEterna Zentaris Inc. (USA) (NASDAQ:AEZS) shares the same investor sentiment as that of Echelon Corporation (NASDAQ:ELON), with both having four hedge fund investors each. Considering that hedge funds aren’t fond of this stock in relation to other companies compared in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case, more research is warranted.

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