Hedge Funds Are Piling Back Into Zogenix, Inc. (ZGNX): Should You Follow?

With general bullishness amongst the heavyweights, key hedge funds have been driving this positive sentiment. Ghost Tree Capital initiated the biggest position in Zogenix, Inc. (NASDAQ:ZGNX). Ghost Tree Capital had $3.7 million invested in the company at the end of the quarter. Ori Hershkovitz’s Nexthera Capital also initiated a $3 million position during the quarter. The following funds were also among the new ZGNX investors: Thomas Bailard’s Bailard Inc, Vishal Bhutani and Joshua Bederman’s Pyrrho Capital Management, and Joseph Edelman’s Perceptive Advisors.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Zogenix, Inc. (NASDAQ:ZGNX) but similarly valued. These stocks are ChemoCentryx Inc (NASDAQ:CCXI), Guidance Software, Inc. (NASDAQ:GUID), Home Bancorp, Inc. (NASDAQ:HBCP), and New America High Income Fund Inc. (NYSE:HYB). This group of stocks’ market caps are closest to ZGNX’s market cap.

As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $30 million. That figure was $102 million in ZGNX’s case. ChemoCentryx Inc (NASDAQ:CCXI) is the most popular stock in this table. On the other hand New America High Income Fund Inc. (NYSE:HYB) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Zogenix, Inc. (NASDAQ:ZGNX) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

Disclosure: None