Here’s Why Traders Are Piling Into These Five Stocks

WTI has surged by almost 3% today after the EIA reported an impressive 5.2 million barrel drop in inventories in the previous week. Among the stocks that are also surging along with oil are Technical Communications Corporation (NASDAQ:TCCO), Ritter Pharmaceuticals Inc (NASDAQ:RTTR), California Resources Corp (NYSE:CRC), Tableau Software Inc (NYSE:DATA), and iPass Inc. (NASDAQ:IPAS).

Let’s find out why traders are buying each stock and see how the smart money was positioned towards them.

While there are many metrics that investors can assess in the investment process, the hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor to beat the S&P 500 by around 95 basis points per month (see the details here).

Nano-cap Technical Communications Corporation (NASDAQ:TCCO)’s shares have surged by 33% after the company disclosed in an SEC filing that it received an order valued at $2.373 million from Datron World Communications, Inc. for its military-grade DSP 9000 radio encryption equipment. Given the company’s low float, the news has caused substantial volatility in the stock. As with all nano-caps, traders should do due-diligence on both sides of the trade, long and short. None of the around 749 top funds that we track owned shares of Technical Communications Corporation (NASDAQ:TCCO) at the end of June.

Ritter Pharmaceuticals Inc (NASDAQ:RTTR) shares are almost 13% in the green on Wednesday as the company’s bull run continues. Traders have been piling into the nano-cap this week after the company issued a press release on Monday announcing that it has concluded the last patient visit in its Phase 2b/3 clinical trial of RP-G28 for the treatment of lactose intolerance. Top-line results are expected to be announced in the first quarter of next year. If approved, the drug would be the first FDA-approved drug for lactose intolerance, a condition that afflicts a number of people (although to varying degrees). Three funds from our database were long Ritter Pharmaceuticals Inc (NASDAQ:RTTR) at the end of the second quarter, unchanged from the previous quarter.

On the next page, we will find out why California Resources Corp, Tableau Software, and iPass Inc are surging.

Like many other crude-related names, California Resources Corp (NYSE:CRC) shares have gained over 9% as the WTI has advanced close to $52 per barrel after the EIA confirmed yesterday’s bullish API report and showed that crude inventories in the U.S. fell 5.2 million barrels last week. Among the funds we track, 35 funds owned $139.48 million worth of California Resources Corp (NYSE:CRC)’s stock, which accounted for 27.90% of the float on June 30, versus 32 funds and $88 million, respectively, on March 31.

Tableau Software Inc (NYSE:DATA) shares are 5% in the green after the Wall Street Journal published an article on salesforce.com, inc. (NYSE:CRM)’s previous potential M&A target considerations. Courtesy of hacked e-mails from Colin Powell, who is a board member of Salesforce, traders found out that Tableau was apparently one of Salesforce’s potential purchase targets. Whether Tableau still remains a potential takeover target today is an open question, but that fact hasn’t stopped some traders from speculating. A total of 34 funds followed by our team had a bullish position in Tableau Software Inc (NYSE:DATA) at the end of June, unchanged over the quarter.

iPass Inc. (NASDAQ:IPAS) has spiked by 8% after the Maxim analyst Brian Kinstlinger initiated coverage on the stock with a ‘Buy’ rating and a $3 price target. The analyst believes iPass’ wide network of Wi-Fi hotspots could increase productivity. Only two funds from our database had a bullish position in iPass Inc. (NASDAQ:IPAS) at the end of the second quarter, up by one from the previous quarter.

Disclosure: none