How Endocyte, Inc. (ECYT) Stacks Up Against Its Peers

We view hedge fund activity in the stock as unfavorable, but in this case there was only a single hedge fund selling its entire position: PDT Partners. 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 Renaissance Technologies).

Let’s now take a look at hedge fund activity in other stocks similar to Endocyte, Inc. (NASDAQ:ECYT). These stocks are Cherry Hill Mortgage Investment Corp (NYSE:CHMI), Achaogen Inc (NASDAQ:AKAO), ZAIS Financial Corp. (NYSE:ZFC), and Nivalis Therapeutics Inc (NASDAQ:NVLS). This group of stocks’ market valuations are similar to ECYT’s market valuation.

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 $25 million. That figure was $7 million in ECYT’s case. Nivalis Therapeutics Inc (NASDAQ:NVLS) is the most popular stock in this table. On the other hand Cherry Hill Mortgage Investment Corp (NYSE:CHMI) is the least popular one with only 4 bullish hedge fund positions. Endocyte, Inc. (NASDAQ:ECYT) 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.

Disclosure: None