Is Sucampo Pharmaceuticals, Inc. (SCMP) Going to Burn These Hedge Funds?

Amid an overall market correction, many stocks that smart money investors were collectively bullish on tanked during the third quarter. Among them, Valeant and Micron ranked among the top 30 picks and both lost around 20%. Citigroup, which was the third most popular stock, lost 10% amid uncertainty regarding the interest rates. Nevertheless, our research shows that most of the stocks that smart money likes historically generate strong risk-adjusted returns. This is why following the smart money sentiment is a useful tool at identifying the next stock to invest in.

Sucampo Pharmaceuticals, Inc. (NASDAQ:SCMP) shareholders have witnessed an increase in hedge fund sentiment recently. SCMP was in 21 hedge funds’ portfolios at the end of September. There were 15 hedge funds in our database with SCMP positions at the end of the previous quarter. At the end of this article we will also compare SCMP to other stocks including QLogic Corporation (NASDAQ:QLGC), MTS Systems Corporation (NASDAQ:MTSC), and Gener8 Maritime Inc (NYSE:GNRT) to get a better sense of its popularity.

Keeping this in mind, we’re going to take a glance at the new action surrounding Sucampo Pharmaceuticals, Inc. (NASDAQ:SCMP).

How are hedge funds trading Sucampo Pharmaceuticals, Inc. (NASDAQ:SCMP)?

At the end of the third quarter, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 40% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in Sucampo Pharmaceuticals, Inc. (NASDAQ:SCMP). Renaissance Technologies has a $8.8 million position in the stock, comprising less than 0.1% of its 13F portfolio. Coming in second is AQR Capital Management, led by Cliff Asness, holding a $4.4 million position; less than 0.1% of its 13F portfolio is allocated to the company. Some other peers with similar optimism encompass John Overdeck and David Siegel’s Two Sigma Advisors, Israel Englander’s Millennium Management and Peter Muller’s PDT Partners.