Do Hedge Funds Love Tokai Pharmaceuticals Inc (TKAI)?

Due to the fact that Tokai Pharmaceuticals Inc (NASDAQ:TKAI) has witnessed a bearish sentiment from the smart money, it’s safe to say that there were a few funds that decided to sell off their entire stakes heading into Q4. Intriguingly, Jason Karp’s Tourbillon Capital Partners said goodbye to the largest position of the 700 funds monitored by Insider Monkey, worth an estimated $6.9 million in stock. Rob Citrone’s fund, Discovery Capital Management, also said goodbye to its stock, about $0.2 million worth of shares. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s check out hedge fund activity in other stocks similar to Tokai Pharmaceuticals Inc (NASDAQ:TKAI). We will take a look at MCBC Holdings Inc (NASDAQ:MCFT), Mazor Robotics Ltd – ADR (NASDAQ:MZOR), Fluidigm Corporation (NASDAQ:FLDM), and Invivo Therapeutics Holdings Corp (NASDAQ:NVIV). All of these stocks’ market caps match Tokai Pharmaceuticals Inc (NASDAQ:TKAI)’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MCFT 7 143621 7
MZOR 6 18336 2
FLDM 11 56420 -4
NVIV 4 2559 2

As you can see, these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $55 million. That figure was $24 million in Tokai Pharmaceuticals Inc (NASDAQ:TKAI)’s case. Fluidigm Corporation (NASDAQ:FLDM) is the most popular stock in this table. On the other hand, Invivo Therapeutics Holdings Corp (NASDAQ:NVIV) is the least popular one with only 4 bullish hedge fund positions. Tokai Pharmaceuticals Inc (NASDAQ:TKAI) 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, Fluidigm Corporation (NASDAQ:FLDM) might be a better candidate to consider a long position.