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Why Chipotle, Baidu, Cempra, and More Are in the Spotlight

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On the day before election day, all three indexes have opened up in the green after the FBI cleared Hillary Clinton on the email matter.

In this article, we’ll find out why Chipotle Mexican Grill, Inc. (NYSE:CMG), Baidu Inc (ADR) (NASDAQ:BIDU), Cempra Inc (NASDAQ:CEMP), BP plc (ADR) (NYSE:BP), and Total SA (ADR) (NYSE:TOT) are trending today and also analyze how hedge funds were positioned among the stocks using SEC filings.

At Insider Monkey, we track around 750 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on, can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see the details).

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Susan Law Cain / Shutterstock.com

Traders are watching Chipotle Mexican Grill, Inc. (NYSE:CMG) after Reuters reported that Bill Ackman of Pershing Square, which owns almost 10% of Chipotle Mexican Grill, Inc. (NYSE:CMG)’s common stock, has signed a confidentiality agreement with the burrito chain. The agreement is a potential signal that Ackman may have enough support from fellow investors to enact changes at the restaurant chain without going through a messy proxy contest. According to people in the know, Ackman would like multiple board seats as he seeks to improve Chipotle’s marketing and food safety. Chipotle has said that it is ‘actively working on board refreshment’. Chipotle bulls hope Ackman can unlock value in the chain seeing as shares of the stock have fallen by 22% year-to-date.

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Baidu Inc (ADR) (NASDAQ:BIDU) is trending after executive Li Mingyuan, who many thought was in the running to eventually succeed current CEO Robin Li, resigned. Mingyuan stepped down due to an internal probe that showed that he had conflicts of interests with another company that Baidu bought. Despite the news, shares of Baidu are up by 2.5% in morning trading due to broader market strength. The number of funds in our system with holdings in Baidu Inc (ADR) (NASDAQ:BIDU) fell by 16 quarter-over-quarter to 56 at the end of June.

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Cempra Inc (NASDAQ:CEMP) shares have rallied by 9% after the company revealed that an FDA Advisory Committee voted 7-to-6 in favor of Solithromycin, judging that the efficacy results of the treatment outweighed the risks. Solithromycin is Cempra’s potential treatment for community-acquired bacterial pneumonia. The FDA has until late-December to reveal whether the agency will approve or reject the drug. 14 funds that we track had a long position in Cempra Inc (NASDAQ:CEMP) at the end of the second quarter, unchanged from the end of the first quarter.

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On the next page we’ll examine what’s happening with BP plc (ADR) and Total SA (ADR).

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