We view hedge fund activity in the stock as unfavorable, but in this case there was only a single hedge fund selling its entire position: First Eagle Investment 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 683 Capital Partners).
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Pain Therapeutics, Inc. (NASDAQ:PTIE) but similarly valued. These stocks are CymaBay Therapeutics Inc (NASDAQ:CBAY), Hamilton Bancorp Inc (NASDAQ:HBK), GulfMark Offshore, Inc. (NYSE:GLF), and FalconStor Software, Inc. (NASDAQ:FALC). This group of stocks’ market values match PTIE’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 4 hedge funds with bullish positions and the average amount invested in these stocks was $6 million. That figure was $8 million in PTIE’s case. CymaBay Therapeutics Inc (NASDAQ:CBAY) is the most popular stock in this table. On the other hand Hamilton Bancorp Inc (NASDAQ:HBK) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Pain Therapeutics, Inc. (NASDAQ:PTIE) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.