How Achaogen Inc (AKAO) Stacks Up Against Its Peers

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: DAFNA Capital Management. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Redmile Group).

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Achaogen Inc (NASDAQ:AKAO) but similarly valued. We will take a look at ZAIS Financial Corp. (NYSE:ZFC), Nivalis Therapeutics Inc (NASDAQ:NVLS), Xerium Technologies, Inc. (NYSE:XRM), and Corium International Inc (NASDAQ:CORI). This group of stocks’ market caps resemble AKAO’s market cap.

As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $26 million. That figure was $16 million in AKAO’s case. Nivalis Therapeutics Inc (NASDAQ:NVLS) is the most popular stock in this table. On the other hand Corium International Inc (NASDAQ:CORI) is the least popular one with only 3 bullish hedge fund positions. Achaogen Inc (NASDAQ:AKAO) 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 NVLS might be a better candidate to consider taking a long position in.