Why Are These Stocks Advancing on Tuesday?

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.

Chimerix Inc (NASDAQ:CMRX) shares are 6.8% in the green as some of the 6% of the float that is short cover to take profits and as some speculators open long positions in anticipation of a bounce. Chimerix Inc (NASDAQ:CMRX) fell by over 80% yesterday after the biotech company reported disappointing results of the Phase 3 trial, SUPPRESS, which assessed whether the company’s oral antiviral drug candidate, brincidofovir, was able to prevent cytomegalovirus infection in certain patients who underwent hematopoietic cell transplantation. In the study, brincidofovir failed to achieve the study’s primary efficacy endpoint. Despite the results, the company isn’t giving up. CEO M. Michelle Berrey said:

“With a strong cash position, an experienced leadership team, and brincidofovir patent exclusivity through 2034, we continue to believe there is a viable path forward for the development of brincidofovir.”

Neurometrix Inc (NASDAQ:NURO) shares have surged by 7.9% on the news that the company has won an order from one of Mexico’s six major government healthcare institutions for DPNCheck, which is a quantitative nerve conduction test used by healthcare professionals to evaluate systemic neuropathies including diabetic peripheral neuropathy. Mexico could be a growth market for Neurometrix Inc (NASDAQ:NURO) as 12% of adult Mexicans have been diagnosed with type 2 diabetes. Given the nano-cap nature of the stock, we would stay on the sidelines until more financial details are released.

Last but not least, Corcept Therapeutics Incorporated (NASDAQ:CORT) is up by 2% on abnormally high volume as some investors re-balance their portfolios before the end of the tax year and the end of the fourth quarter. According to our data, hedge fund sentiment around Corcept Therapeutics Incorporated (NASDAQ:CORT) has been ambivalent, with 14 elite funds owning around 1.80% of the float on September 30. Among the funds long the stock is Jim Simons’ Renaissance Technologies with a stake of 452,200 shares.

Disclosure: none