Is Heron Therapeutics Inc (HRTX) a Good Stock To Buy?

As aggregate interest increased, specific money managers have jumped into Heron Therapeutics Inc (NASDAQ:HRTX) headfirst. James Dondero’s Highland Capital Management created the largest position in Heron Therapeutics Inc (NASDAQ:HRTX). Highland Capital Management had $11.2 million invested in the company at the end of the quarter. Kevin Kotler’s Broadfin Capital also initiated a $5.2 million position during the quarter. The other funds with new positions in the stock are Anand Parekh’s Alyeska Investment Group, Ken Griffin’s Citadel Investment Group, and Glenn Russell Dubin’s Highbridge Capital Management.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Heron Therapeutics Inc (NASDAQ:HRTX) but similarly valued. These stocks are Rent-A-Center Inc (NASDAQ:RCII), Capella Education Company (NASDAQ:CPLA), LHC Group, Inc. (NASDAQ:LHCG), and ePlus Inc. (NASDAQ:PLUS). All of these stocks’ market caps match HRTX’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
RCII 18 73846 -1
CPLA 15 138859 -2
LHCG 19 71586 2
PLUS 9 28282 -2

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 $78 million, which is lower compared to $380 million in HRTX’s case. LHC Group, Inc. (NASDAQ:LHCG) is the most popular stock in this table. On the other hand ePlus Inc. (NASDAQ:PLUS) is the least popular one with only nine funds holding shares. Heron Therapeutics Inc (NASDAQ:HRTX) 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 LHC Group might be a better candidate to consider taking a long position in.

Disclosure: none