Is Biota Pharmaceuticals Inc (BOTA) A Good Stock To Buy?

Seeing as Biota Pharmaceuticals Inc (NASDAQ:BOTA) has experienced a declination in interest from the aggregate hedge fund industry, it’s easy to see that there exists a select few money managers that slashed their entire stakes last quarter. It’s worth mentioning that Julian Baker and Felix Baker’s Baker Bros. Advisors sold off the largest investment of the 700 funds monitored by Insider Monkey, comprising close to $1.7 million in stock. Peter Kolchinsky’s fund, RA Capital Management, also dumped its stock, about $1.7 million worth of shares. These moves are interesting, as total hedge fund interest fell by 3 funds last quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Biota Pharmaceuticals Inc (NASDAQ:BOTA) but similarly valued. We will take a look at IRIDEX Corporation (NASDAQ:IRIX), Approach Resources Inc. (NASDAQ:AREX), First South Bancorp, Inc. (NASDAQ:FSBK), and Magnum Hunter Resources Corp (NYSE:MHR). All of these stocks’ market caps resemble Biota Pharmaceuticals Inc (NASDAQ:BOTA)’s market cap.

As you can see, these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $6 million. That figure was $9 million in Biota Pharmaceuticals Inc (NASDAQ:BOTA)’s case. Magnum Hunter Resources Corp (NYSE:MHR) is the most popular stock in this table. On the other hand, IRIDEX Corporation (NASDAQ:IRIX) is the least popular one with only 4 bullish hedge fund positions. Biota Pharmaceuticals Inc (NASDAQ:BOTA) 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, Magnum Hunter Resources Corp (NYSE:MHR) might be a better candidate to consider a long position.