How Top Money Managers Are Trading Infinity Pharmaceuticals Inc. (INFI)

With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to buy or sell heading into the fourth quarter. One of these stocks was Infinity Pharmaceuticals Inc. (NASDAQ:INFI).

Infinity Pharmaceuticals Inc. was in 20 hedge funds’ portfolios at the end of September. INFI has experienced a decrease in activity from the world’s largest hedge funds lately. There were 21 hedge funds in our database with INFI holdings at the end of the previous quarter. At the end of this article we will also compare INFI to other stocks including Myers Industries, Inc. (NYSE:MYE), Omeros Corporation (NASDAQ:OMER), and First Financial Corp (NASDAQ:THFF) to get a better sense of its popularity.

In the financial world there are many gauges shareholders put to use to grade stocks. A duo of the most under-the-radar gauges are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the best picks of the best fund managers can outperform the S&P 500 by a healthy margin (see the details here).

Now, let’s take a gander at the latest action encompassing Infinity Pharmaceuticals Inc. (NASDAQ:INFI).

How have hedgies been trading Infinity Pharmaceuticals Inc. (NASDAQ:INFI)?

At the end of the third quarter, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of -5% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Samuel Isaly’s OrbiMed Advisors has the largest position in Infinity Pharmaceuticals Inc. (NASDAQ:INFI), worth close to $37.3 million, amounting to 0.4% of its total 13F portfolio. On OrbiMed Advisors’ heels is Deerfield Management, managed by James E. Flynn, which holds a $33 million position; 1.3% of its 13F portfolio is allocated to the company. Remaining peers that are bullish comprise Renaissance Technologies, Jeremy Green’s Redmile Group, and D E Shaw.

Judging by the fact that Infinity Pharmaceuticals Inc. (NASDAQ:INFI) has witnessed falling interest from hedge fund managers, we can see that there lies a certain “tier” of hedgies that elected to cut their entire stakes in the third quarter. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital sold off the largest position of the “upper crust” of funds tracked by Insider Monkey, valued at about $3.4 million in stock, and Peter Muller’s PDT Partners was right behind this move, as the fund dropped about $2 million worth of shares. These transactions are intriguing to say the least, as total hedge fund interest dropped by 1 fund in the third quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Infinity Pharmaceuticals Inc. (NASDAQ:INFI) but similarly valued. We will take a look at Myers Industries, Inc. (NYSE:MYE), Omeros Corporation (NASDAQ:OMER), First Financial Corp (NASDAQ:THFF), and FairPoint Communications Inc (NASDAQ:FRP). This group of stocks’ market caps are closest to INFI’s market cap.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $80 million. That figure was $100 million in INFI’s case. FairPoint Communications Inc (NASDAQ:FRP) is the most popular stock in this table. On the other hand Myers Industries, Inc. (NYSE:MYE) is the least popular one with only 7 bullish hedge fund positions. Infinity Pharmaceuticals Inc. (NASDAQ:INFI) 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 pouring money into also. In this regard FRP might be a better candidate to consider a long position in.