Is CARDIOME PHARMA CORP (CRME) A Good Stock To Buy?

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Springbok Capital. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically, a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case here because only one of the 700+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was AlphaOne Capital Partners).

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as CARDIOME PHARMA CORP (NASDAQ:CRME) but similarly valued. These stocks are Hill International Inc (NYSE:HIL), Allied Motion Technologies, Inc. (NASDAQ:AMOT), Enphase Energy Inc (NASDAQ:ENPH), and Bill Barrett Corporation (NYSE:BBG). This group of stocks’ market caps are similar to CARDIOME PHARMA CORP (NASDAQ:CRME)’s market cap.

As you can see, these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $19 million. That figure was $38 million in CARDIOME PHARMA CORP (NASDAQ:CRME)’s case. Bill Barrett Corporation (NYSE:BBG) is the most popular stock in this table. On the other hand, Allied Motion Technologies, Inc. (NASDAQ:AMOT) is the least popular one with only 7 bullish hedge fund positions. CARDIOME PHARMA CORP (NASDAQ:CRME) 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, Bill Barrett Corporation (NYSE:BBG) might be a better candidate to consider a long position.