Hedge Funds Are Crazy About Zogenix, Inc. (ZGNX)

With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was Zogenix, Inc. (NASDAQ:ZGNX).

Zogenix, Inc. (NASDAQ:ZGNX) was in 25 hedge funds’ portfolios at the end of the third quarter of 2015. ZGNX has seen an increase in support from the world’s most elite money managers lately. There were 15 hedge funds in our database with ZGNX positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Comtech Telecomm. Corp. (NASDAQ:CMTL), Cardionet Inc (NASDAQ:BEAT), and First Community Bancshares Inc (NASDAQ:FCBC) to gather more data points.

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To most market participants, hedge funds are assumed to be underperforming, old investment tools of years past. While there are over 8000 funds trading at the moment, We choose to focus on the upper echelon of this group, around 700 funds. These investment experts handle the majority of the smart money’s total capital, and by paying attention to their best stock picks, Insider Monkey has unearthed a number of investment strategies that have historically exceeded the broader indices. Insider Monkey’s small-cap hedge fund strategy outperformed the S&P 500 index by 12 percentage points annually for a decade in their back tests.

With all of this in mind, we’re going to take a peek at the key action regarding Zogenix, Inc. (NASDAQ:ZGNX).

What have hedge funds been doing with Zogenix, Inc. (NASDAQ:ZGNX)?

At Q3’s end, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 67% from the second quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Hal Mintz’s Sabby Capital has the most valuable call position in Zogenix, Inc. (NASDAQ:ZGNX), worth close to $42 million, corresponding to 1.7% of its total 13F portfolio. On Sabby Capital’s heels is Baker Bros. Advisors, led by Julian Baker and Felix Baker, holding a $24.3 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other professional money managers that are bullish encompass Peter Kolchinsky’s RA Capital Management, Jeffrey Jay and David Kroin’s Great Point Partners and Kevin Kotler’s Broadfin Capital.