With the new year rapidly approaching and many investors actively positioning themselves for the end of the 2015 tax year, shares of Freeport-McMoRan Inc (NYSE:FCX), Chimerix Inc (NASDAQ:CMRX), Neurometrix Inc (NASDAQ:NURO), Corcept Therapeutics Incorporated (NASDAQ:CORT), and Whiting Petroleum Corp (NYSE:WLL) are among the stocks well in the green. Let’s find out why investors are buying.
Given that Insider Monkey has done a lot of research into what the smart money likes and doesn’t like, let’s also analyze relevant hedge fund sentiment toward these stocks. We pay attention to hedge funds’ moves because our research has shown that hedge funds are extremely talented at picking stocks on the long side of their portfolios. It is true that hedge fund investors have been underperforming the market in recent years. However, this was mainly because hedge funds’ short stock picks lost a ton of money during the bull market that started in March 2009. Hedge fund investors also paid an arm and a leg for the services that they received. We have been tracking the performance of hedge funds’ 15 most popular small-cap stock picks in real time since the end of August 2012. These stocks have returned 102% since then and outperformed the S&P 500 Index by around 53 percentage points (see the details here). That’s why we believe it is important to pay attention to hedge fund sentiment; we also don’t like paying huge fees.
Freeport-McMoRan Inc (NYSE:FCX) and Whiting Petroleum Corp (NYSE:WLL) are up by 3.7% and 4% respectively on the back of stronger crude prices. The near month contract for WTI is up 2.3% on the day as some bears take profits before the end of the fourth quarter and position size correctly so a short squeeze doesn’t hurt as much. Although crude is oversupplied, the EIA reported better than expected results last Wednesday with a big 4.9 million barrel drawdown, and the shorts want to make sure a potentially better-than expected report tomorrow doesn’t hurt them as much again by covering some of their positions. Investors could also be buying Freeport-McMoRan Inc (NYSE:FCX) in anticipation that the company’s oil and gas auction scheduled in early 2016 could be a positive catalyst that improves sentiment. Freeport’s stock lost over 10% yesterday following the announcement that the company’s co-founder James Moffett resigned as executive chairman of the company’s board.
Of the around 730 elite funds we track, 44 funds owned $1.39 billion worth of Freeport-McMoRan Inc (NYSE:FCX) shares, equal to 13.8% of the company’s float, and 42 funds held $767.2 million worth of of Whiting Petroleum Corp (NYSE:WLL) stock at the end of the third quarter. The 42 funds long Whiting accounted for almost a quarter of the independent E&P’s float.
On the next page, we examine Neurometrix Inc, Corcept Therapeutics Incorporated, and Chimerix.