Is Insys Therapeutics Inc (INSY) A Good Stock To Buy?

Judging by the fact that Insys Therapeutics Inc (NASDAQ:INSY) has witnessed a decline in interest from the aggregate hedge fund industry, we can see that there were a few hedge funds who sold off their full holdings in the third quarter. It’s worth mentioning that Alok Agrawal’s Bloom Tree Partners sold off the largest investment of the “upper crust” of funds followed by Insider Monkey, valued at about $25.3 million in stock. Peter Muller’s fund, PDT Partners, also dumped its stock, about $8.8 million worth. These moves are interesting, as total hedge fund interest fell by 5 funds in the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Insys Therapeutics Inc (NASDAQ:INSY). These stocks are First Financial Bankshares Inc (NASDAQ:FFIN), Louisiana-Pacific Corporation (NYSE:LPX), Monolithic Power Systems, Inc. (NASDAQ:MPWR), and Rowan Companies PLC (NYSE:RDC). This group of stocks’ market values resemble INSY’s market value.

As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $260 million. That figure was $313 million in INSY’s case. Rowan Companies PLC (NYSE:RDC) is the most popular stock in this table, while First Financial Bankshares Inc (NASDAQ:FFIN) is the least popular one with only 5 bullish hedge fund positions. Insys Therapeutics Inc (NASDAQ:INSY) 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 RDC might be a better candidate to consider a long position.