Is Pfenex Inc (PFNX) Going to Burn These Hedge Funds?

With a general bullishness amongst the heavyweights, some big names have jumped into Pfenex Inc (NYSEMKT:PFNX) headfirst. Highland Capital Management, managed by James Dondero, created the most valuable position in Pfenex Inc (NYSEMKT:PFNX). Highland Capital Management had $4.4 million invested in the company at the end of the quarter. Ken Fisher’s Fisher Asset Management also initiated a $0.5 million position during the quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Pfenex Inc (NYSEMKT:PFNX) but similarly valued. We will take a look at Kimball Electronics Inc (NASDAQ:KE), Ocular Therapeutix Inc (NASDAQ:OCUL), NeoGenomics, Inc. (NASDAQ:NEO), and Perry Ellis International, Inc. (NASDAQ:PERY). This group of stocks’ market caps match PFNX’s market cap.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $28 million. That figure was $47 million in PFNX’s case. Perry Ellis International, Inc. (NASDAQ:PERY) is the most popular stock in this table. On the other hand NeoGenomics, Inc. (NASDAQ:NEO) is the least popular one with only 9 bullish hedge fund positions. Pfenex Inc (NYSEMKT:PFNX) 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 PERY might be a better candidate to consider a long position.