5 Stocks That Had Hedge Funds Jumping For Joy This Week

Jim SimonsWe have identified five stocks that had absolutely fantastic days on Thursday. Assuming the funds we track have not changed their holdings since the end of June, there were key funds that made big money on these price gains. The first company on our list is LogMeIn Inc (NASDAQ:LOGM). The company was up 17% on Thursday—$3.40—posting earnings that came in at $0.18, compared to $0.16 ESP estimates. RBC Capital reiterated its outperform rating on the earnings news. The driving factor for the share jump was solid performance following last quarter’s mixed results, but also strong customer acquisition numbers. However, a point of concern is that now the company is trading at a P/E of over 190x.

Despite the fact that the company is down 35% year to date, the stock pop was a sight for sore eyes for top funds Ken Griffin, Polar Capital, Israel Englander and Jim Simons (caricatured above). The top two fund owners Ken Griffin and Polar Capital, made big bets on the stock during 2Q. Griffin upped his 1Q stake over 2000% and Simons took an entirely new stake, with each owning 410,000 and 265,000 shares, respectively, at the end of June. Griffin may have made over $1.4 million and Simons over $900,000 on yesterday’s move. One director has been dumping his shares since mid-2012 and may have missed out on the big move.

Angie’s List Inc (NASDAQ:ANGI) is another company making big money for investors yesterday, with its market value seeing a surge of 25%, or $2.35 per share. The company had been in steady decline all year, but saw a 75% increase in revenues for 3Q, from the same period last year, and although the company posted negative EPS again, the loss from the same quarter last year was cut in half. The company posted 2Q EPS at a loss of $0.32, compared to a loss of $0.66 at the same time last year. The niche peer review website is expected to grow earnings annually at nearly 50% over the next five years, assuming competition stays virtually nonexistent.

Ken Griffin made a little money on the stock’s jump, but the big winner was TCS Capital Management. TCS increased their 1Q stake over 100% during 2Q, but more importantly the company had 11% of their 2Q 13F invested in Angie’s List. Owning over 1 million shares the company may have made around $2.35 million.

Overstock.com, Inc. (NASDAQ:OSTK) was up 15% yesterday, or $1.90 per share. The company reported EPS that beat expectations by over 200%. The discount retailer is up almost 100% year to date, and reported revenue up 7% and earnings up 400% from the same period last year.  Overstock has seen positive options action based on the earnings announcement.

The two top funds invested in Overstock by far at the end of June were Fairfax Financial Holdings and Chou Associates Management, with Fairfax owning 3.3 million shares and Chou 2.3 million. Fairfax may have made out with $6.3 million, but Chou could have come out the best, given the firm had 4% of its 13F invested in the company. Chou’s take could have been $4.3 million.

PSS World Medical, Inc. (NASDAQ:PSSI) was up 30% yesterday, or $6.70 per share, on the news the company was being bought. The purchaser, McKesson, announced it would buy the medical supply company for $2.1 billion or $29 per share. PSS was trading in line with its peers on a P/E basis before the announcement, but now has an acquisition premium, and trades above 20x.

North Run Capital, with a new stake of 1.7 million shares, and Ken Fisher, with 900,000 shares, were the top 2Q fund owners for PSS. While Fisher may have made around $6 million, North Run may have made over $11 million, which could make for a good quarter for the fund, given it had over 4% of its 13F invested in PSSI.

Gardner Denver, Inc. (NYSE:GDI), up over 20% and over $12, on news that the company had hired Goldman Sachs to explore possible ways to unlock shareholder value. This includes a possible sale or merger of the company. The company remains down year to date and saw its CEO resign in July. Amid a string of earnings misses every quarter for the past year, and expected EPS growth will be down this year and next, this might be the best news Gardner could hope for. The company is a manufacturer of compressors and vacuums used in industrial applications, and a slowing economy has meant poor performance.

Notable investor Chuck Royce had over 2 million shares, alongside the top fund owner Jeffery Ubben, who owned 2.5 million shares. These funds made out better in Gardner than the funds in the other four companies. Royce may have cashed in $25 million and Ubben $30 million.

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