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Is Pernix Therapeutics Holdings Inc (PTX) A Good Stock To Buy?

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30th, so let’s proceed with the discussion of the hedge fund sentiment on Pernix Therapeutics Holdings Inc (NASDAQ:PTX).

Pernix Therapeutics Holdings Inc (NASDAQ:PTX) investors should be aware of a decrease in support from the world’s most elite money managers in recent months. Pernix Therapeutics Holdings Inc (NASDAQ:PTX) was in 17 hedge funds’ portfolios at the end of September. There were 19 hedge funds in our database with Pernix Therapeutics Holdings Inc (NASDAQ:PTX) positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Pendrell Corporation – Class A (NASDAQ:PCO), Endocyte, Inc. (NASDAQ:ECYT), and Genocea Biosciences Inc (NASDAQ:GNCA) to gather more data points.

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If you’d ask most stock holders, hedge funds are perceived as worthless, old investment tools of the past. While there are more than 8000 funds trading at present, our experts look at the bigwigs of this club, about 700 funds. These money managers administer bulk of the smart money’s total capital, and by keeping track of their matchless investments, Insider Monkey has determined several investment strategies that have historically outpaced Mr. Market. Insider Monkey’s small-cap hedge fund strategy outrun the S&P 500 index by 12 percentage points per year for a decade in their back tests.

Now, let’s review the new action regarding Pernix Therapeutics Holdings Inc (NASDAQ:PTX).

What does the smart money think about Pernix Therapeutics Holdings Inc (NASDAQ:PTX)?

Heading into Q4, a total of 17 of the hedge funds tracked by Insider Monkey were long in this stock, a drop of 11% from one quarter earlier. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Kevin Kotler’s Broadfin Capital had the biggest position in Pernix Therapeutics Holdings Inc (NASDAQ:PTX), worth close to $19.2 million, corresponding to 1.1% of its total 13F portfolio. The second most bullish hedge fund manager is Kurt von Emster of venBio Select Advisor, with a $19 million position; 4.9% of its 13F portfolio is allocated to the stock. Some other members of the smart money with similar optimism contain Steven Boyd’s Armistice Capital, Kevin Kotler’s Broadfin Capital and Dennis Purcell’s Aisling Capital.

Because Pernix Therapeutics Holdings Inc (NASDAQ:PTX) has experienced bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there lies a certain “tier” of funds that decided to sell off their entire stakes at the end of the third quarter. At the top of the heap, Glenn Russell Dubin’s Highbridge Capital Management dumped the biggest investment of all the hedgies monitored by Insider Monkey, comprising close to $0.9 million in stock, and Vishal Saluja and Pham Quang of Endurant Capital Management was right behind this move, as the fund cut about $0.6 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 2 funds at the end of the third quarter.

Let’s check out hedge fund activity in other stocks similar to Pernix Therapeutics Holdings Inc (NASDAQ:PTX). These stocks are Pendrell Corporation – Class A (NASDAQ:PCO), Endocyte, Inc. (NASDAQ:ECYT), Genocea Biosciences Inc (NASDAQ:GNCA), and Limelight Networks, Inc. (NASDAQ:LLNW). All of these stocks’ market caps match Pernix Therapeutics Holdings Inc (NASDAQ:PTX)’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PCO 8 59713 1
ECYT 10 15107 3
GNCA 14 34354 4
LLNW 12 12206 1

As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $30 million.That figure was $84 millions in Pernix Therapeutics Holdings Inc (NASDAQ:PTX)’s case. Genocea Biosciences Inc (NASDAQ:GNCA) is the most popular stock in this table. On the other hand Pendrell Corporation – Class A (NASDAQ:PCO) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Pernix Therapeutics Holdings Inc (NASDAQ:PTX) is more popular among hedge funds. Considering that hedge funds are fond of this stock, it may be a good idea to analyze it in detail despite the total number of funds long Pernix decreasing by two.

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