Is SurModics, Inc. (SRDX) Worthy of Your Portfolio?

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Highbridge Capital Management. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was McKinley Capital Management).

Let’s now review hedge fund activity in other stocks similar to SurModics, Inc. (NASDAQ:SRDX). We will take a look at Boingo Wireless Inc (NASDAQ:WIFI), DHT Holdings Inc (NYSE:DHT), Midland States Bancorp Inc (NASDAQ:MSBI), and Libbey Inc. (NYSEAMEX:LBY). This group of stocks’ market caps resemble SRDX’s market cap.

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 $40 million. That figure was $70 million in SRDX’s case. Boingo Wireless Inc (NASDAQ:WIFI) is the most popular stock in this table. On the other hand Midland States Bancorp Inc (NASDAQ:MSBI) is the least popular one with only two funds having reported long positions. SurModics, Inc. (NASDAQ:SRDX) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard Boingo Wireless Inc (NASDAQ:WIFI) might be a better candidate to consider taking a long position in.

Disclosure: none