Is Cumberland Pharmaceuticals, Inc. (CPIX) A Good Stock To Buy?

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Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Cumberland Pharmaceuticals, Inc. (NASDAQ:CPIX) but similarly valued. We will take a look at Tremor Video Inc (NYSE:TRMR), Trillium Therapeutics Inc. (NASDAQ:TRIL), RADCOM Ltd. (NASDAQ:RDCM), and Mast Therapeutics Inc (NYSEMKT:MSTX). This group of stocks’ market caps match CPIX’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TRMR 7 8047 -1
TRIL 8 14983 1
RDCM 4 13912 -1
MSTX 7 8108 0

As you can see these stocks had an average of 6.5 hedge funds with bullish positions and the average amount invested in these stocks was $11 million. That figure was $14 million in CPIX’s case. Trillium Therapeutics Inc. (NASDAQ:TRIL) is the most popular stock in this table. On the other hand RADCOM Ltd. (NASDAQ:RDCM) is the least popular one with only 4 bullish hedge fund positions. Cumberland Pharmaceuticals, Inc. (NASDAQ:CPIX) 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 TRIL might be a better candidate to consider a long position.

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