Is OncoMed Pharmaceuticals Inc (OMED) A Good Stock To Buy?

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With a general bullishness amongst the heavyweights, key hedge funds have jumped into OncoMed Pharmaceuticals Inc (NASDAQ:OMED) headfirst. Millennium Management, managed by Israel Englander, initiated the most outsized position in OncoMed Pharmaceuticals Inc (NASDAQ:OMED). Millennium Management had $2 million invested in the company at the end of the quarter. Jacob Gottlieb’s Visium Asset Management also initiated a $1.2 million position during the quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as OncoMed Pharmaceuticals Inc (NASDAQ:OMED) but similarly valued. These stocks are Superior Industries International Inc. (NYSE:SUP), NN, Inc. (NASDAQ:NNBR), Double Eagle Acqusition Corp (NASDAQ:EAGL), and Xencor Inc (NASDAQ:XNCR). This group of stocks’ market valuations are closest to OMED’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SUP 12 58327 5
NNBR 17 59314 2
EAGL 21 188341 21
XNCR 19 91690 3

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $99 million, versus $42 million in OMED’s case. Double Eagle Acqusition Corp (NASDAQ:EAGL) is the most popular stock in this table, while Superior Industries International Inc. (NYSE:SUP) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks OncoMed Pharmaceuticals Inc (NASDAQ:OMED) is even less popular than SUP. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

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