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Is Ardelyx Inc (ARDX) A Good Stock To Buy?

Judging by the fact that Ardelyx Inc (NASDAQ:ARDX) has faced a falling interest from hedge fund managers, logic holds that there were a few money managers that decided to sell off their full holdings last quarter. It’s worth mentioning that Herb Wagner’s FinePoint Capital dumped the biggest position of the 700 funds monitored by Insider Monkey, worth about $2.2 million in stock, and Hal Mintz’s Sabby Capital was right behind this move, as the fund cut about $0.2 million worth of shares. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 3 funds last quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Ardelyx Inc (NASDAQ:ARDX). These stocks are Altisource Portfolio Solutions S.A. (NASDAQ:ASPS), NMI Holdings Inc (NASDAQ:NMIH), Trevena Inc (NASDAQ:TRVN), and Sabine Royalty Trust (NYSE:SBR). This group of stocks’ market values are similar to Ardelyx Inc (NASDAQ:ARDX)’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ASPS 12 107933 -2
NMIH 24 235586 4
TRVN 19 79962 7
SBR 5 9749 0

As you can see, these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $108 million. That figure was $72 million in Ardelyx Inc (NASDAQ:ARDX)’s case. NMI Holdings Inc (NASDAQ:NMIH) is the most popular stock in this table. On the other hand, Sabine Royalty Trust (NYSE:SBR) is the least popular one with only 5 bullish hedge fund positions. Ardelyx Inc (NASDAQ:ARDX) 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, NMI Holdings Inc (NASDAQ:NMIH) might be a better candidate to consider a long position.

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