Should You Avoid Impax Laboratories Inc (IPXL)?

Seeing as Impax Laboratories Inc (NASDAQ:IPXL) has experienced bearish sentiment from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of funds who were dropping their full holdings by the end of the third quarter. Interestingly, Yen Liow’s Aravt Global got rid of the largest stake of all the investors tracked by Insider Monkey, worth about $64.3 million in stock, and Alan Fournier’s Pennant Capital Management was right behind this move, as the fund dumped about $56.2 million worth of IPXL shares.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Impax Laboratories Inc (NASDAQ:IPXL) but similarly valued. We will take a look at Brady Corp (NYSE:BRC), VeriFone Systems Inc (NYSE:PAY), Wix.Com Ltd (NASDAQ:WIX), and Theravance Biopharma Inc (NASDAQ:TBPH). This group of stocks’ market values are similar to IPXL’s market value.

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $339 million. That figure was $313 million in IPXL’s case. Wix.Com Ltd (NASDAQ:WIX) is the most popular stock in this table. On the other hand Theravance Biopharma Inc (NASDAQ:TBPH) is the least popular one with only 12 bullish hedge fund positions. Impax Laboratories Inc (NASDAQ:IPXL) 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 WIX might be a better candidate to consider taking a long position in.

Disclosure: none.