Should You Avoid Achaogen Inc (AKAO)?

Because Achaogen Inc (NASDAQ:AKAO) has faced a falling interest from hedge fund managers, logic holds that there was a specific group of hedgies who sold off their full holdings in the third quarter. It’s worth mentioning that Mark Lampert’s Biotechnology Value Fund / BVF Inc cut the largest investment of the 700 funds followed by Insider Monkey, totaling close to $0.6 million in stock. Anand Parekh’s fund, Alyeska Investment Group, also dropped its stock, about $0.1 million worth of shares. These moves are important to note, as aggregate hedge fund interest fell by 2 funds in the third quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Achaogen Inc (NASDAQ:AKAO) but similarly valued. We will take a look at Epirus Biopharmaceuticals Inc (NASDAQ:EPRS), Vermillion, Inc. (NASDAQ:VRML), Digital Turbine Inc (NASDAQ:APPS), and Ocean Shore Holding Co (NASDAQ:OSHC). This group of stocks’ market caps matches Achaogen Inc (NASDAQ:AKAO)’s market cap.

As you can see, these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $10 million in Achaogen Inc (NASDAQ:AKAO)’s case. Epirus Biopharmaceuticals Inc (NASDAQ:EPRS) is the most popular stock in this table. On the other hand, Vermillion, Inc. (NASDAQ:VRML) is the least popular one with only 4 bullish hedge fund positions. Achaogen Inc (NASDAQ:AKAO) 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, Epirus Biopharmaceuticals Inc (NASDAQ:EPRS) might be a better candidate to consider a long position.