How Does Smart Money Feel About Acura Pharmaceuticals, Inc. (ACUR)?

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 for identifying the next stock to invest in.

Acura Pharmaceuticals, Inc. (NASDAQ:ACUR) shareholders have witnessed an increase in hedge fund sentiment lately. ACUR was in 4 hedge funds’ portfolios at the end of September. There was 1 hedge fund in our database with ACUR holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why, at the end of this article, we will examine companies such as Luna Innovations Incorporated (NASDAQ:LUNA), SMTC Corporation (USA) (NASDAQ:SMTX), and Deswell Industries, Inc. (NASDAQ:DSWL) to gather more data points.

In the financial world, there are numerous signals stock market investors put to use to assess publicly traded companies. A duo of the best signals is composed of hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the top hedge fund managers can outperform the S&P 500 by a superb margin (see the details here).

Now, let’s check out the new action encompassing Acura Pharmaceuticals, Inc. (NASDAQ:ACUR).

How are hedge funds trading Acura Pharmaceuticals, Inc. (NASDAQ:ACUR)?

At the end of the third quarter, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 300% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their stakes substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Deerfield Management, managed by James E. Flynn, holds the number one position in Acura Pharmaceuticals, Inc. (NASDAQ:ACUR). Deerfield Management has a $2.4 million position in the stock, comprising 0.1% of its 13F portfolio. On Deerfield Management’s heels is Sabby Capital, led by Hal Mintz, holding a $1.7 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers that hold long positions consist of Jim Simons’s Renaissance Technologies, and Glenn Russell Dubin’s Highbridge Capital Management.

With a general bullishness amongst the heavyweights, some big names have jumped into Acura Pharmaceuticals, Inc. (NASDAQ:ACUR) headfirst. Deerfield Management created the most valuable position in Acura Pharmaceuticals, Inc. (NASDAQ:ACUR). Sabby Capital also initiated its position during the quarter.

Let’s go over hedge fund activity in other stocks similar to Acura Pharmaceuticals, Inc. (NASDAQ:ACUR). We will take a look at Luna Innovations Incorporated (NASDAQ:LUNA), SMTC Corporation (USA) (NASDAQ:SMTX), Deswell Industries, Inc. (NASDAQ:DSWL), and Skyline Corporation (NYSE:SKY). This group of stocks’ market valuations are closest to ACUR’s market valuation.

As you can see these stocks had an average of 4.5 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $4 million in ACUR’s case. SMTC Corporation (USA) (NASDAQ:SMTX) is the most popular stock in this table, while Luna Innovations Incorporated (NASDAQ:LUNA) is the least popular one. Compared to these stocks Acura Pharmaceuticals, Inc. (NASDAQ:ACUR) is even less popular than LUNA. Even though smart money isn’t very fond of this stock, that doesn’t necessarily mean it is overvalued and not a good investment. Further research may even suggest it is worth buying. However, before including it in your portfolio, more research is advisable.