Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s also examine hedge fund activity in other stocks similar to PharmAthene, Inc. (NYSEMKT:PIP). These stocks are Atlas Financial Holdings Inc (NASDAQ:AFH), Orion Marine Group, Inc. (NYSE:ORN), Senomyx Inc. (NASDAQ:SNMX), and Gladstone Capital Corporation (NASDAQ:GLAD). This group of stocks’ market caps resemble PIP’s market cap.
|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 5 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $41 million in PIP’s case. Atlas Financial Holdings Inc (NASDAQ:AFH) is the most popular stock in this table. On the other hand Gladstone Capital Corporation (NASDAQ:GLAD) is the least popular one with only 3 bullish hedge fund positions. PharmAthene, Inc. (NYSEMKT:PIP) 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 AFH might be a better candidate to consider taking a long position in.