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Lexicon Pharmaceuticals, Inc. (LXRX): Are Hedge Funds Right About This Stock?

With general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Benjamin A. Smith’s Laurion Capital Management assembled the most outsized call position in Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX). Laurion Capital Management had $1.8 million invested in the position at the end of the quarter. David Costen Haley’s HBK Investments also initiated a $1.3 million position during the quarter. The only other fund with a new position in the stock is Drew Cupps’ Cupps Capital Management.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) but similarly valued. These stocks are Pennsylvania R.E.I.T. (NYSE:PEI), Premier Inc (NASDAQ:PINC), Lifelock Inc (NYSE:LOCK), and HMS Holdings Corp. (NASDAQ:HMSY). This group of stocks’ market valuations are closest to LXRX’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PEI 9 43041 -4
PINC 19 207165 5
LOCK 26 343165 4
HMSY 19 98394 0

As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $173 million. That figure was $113 million in LXRX’s case. Lifelock Inc (NYSE:LOCK) is the most popular stock in this table. On the other hand Pennsylvania R.E.I.T. (NYSE:PEI) is the least popular one with only 9 bullish hedge fund positions. Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) 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 LOCK might be a better candidate to consider taking a long position in.

Disclosure: None

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