Should You Buy VIVUS, Inc. (VVUS)?

Since VIVUS, Inc. (NASDAQ:VVUS) has faced a declination in interest from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of money managers that decided to sell off their positions entirely last quarter. It’s worth mentioning that Michael A. Price and Amos Meron’s Empyrean Capital Partners dumped the biggest investment of all the hedgies monitored by Insider Monkey, totaling close to $4.7 million in stock, and John Burbank’s Passport Capital was right behind this move, as the fund sold off about $0.1 million worth of shares. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s also examine hedge fund activity in other stocks similar to VIVUS, Inc. (NASDAQ:VVUS). We will take a look at Marchex, Inc. (NASDAQ:MCHX), Ballard Power Systems Inc. (USA) (NASDAQ:BLDP), Red Lion Hotels Corporation (NYSE:RLH), and Newtek Business Services, Corp (NASDAQ:NEWT). This group of stocks’ market values is closest to VIVUS, Inc. (NASDAQ:VVUS)’s market value.

As you can see, these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $9 million. That figure was $28 million in VIVUS, Inc. (NASDAQ:VVUS)’s case. Marchex, Inc. (NASDAQ:MCHX) is the most popular stock in this table. On the other hand, Ballard Power Systems Inc. (USA) (NASDAQ:BLDP) is the least popular one with only 4 bullish hedge fund positions. VIVUS, Inc. (NASDAQ:VVUS) 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, Marchex, Inc. (NASDAQ:MCHX) might be a better candidate to consider a long position.