On the last day of the week, several stocks are in the spotlight due to potential M&A, earnings reports, trial results, and more.
In this article, we analyze match the important events with the associated stocks, Depomed Inc (NASDAQ:DEPO), Horizon Pharma PLC (NASDAQ:HZNP), Oracle Corporation (NYSE:ORCL), Novavax, Inc. (NASDAQ:NVAX), and Fiat Chrysler Automobiles NV (NYSE:FCAU) and use data from the latest round of 13F filings to see how the funds from our database were positioned towards them heading into the current quarter.
While there are many metrics that investors can assess in the investment process, the hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor to beat the S&P 500 by around 95 basis points per month (see the details here).
Depomed Inc (NASDAQ:DEPO) is in the spotlight after Reuters reported that the company is preparing to potentially sell itself. Depomed’s management, along with the help of Morgan Stanley, plans to negotiate with potential acquirers shortly after a court clarifies whether the company can retain the patent exclusivity of its best-seller Nucynta, which should occur by the end of September. By putting itself on the auction block, Depomed is caving in to activist fund manager Jeffrey Smith‘s Starboard Value Lp, who previously had asked management to unlock value by putting itself for sale.
Of the potentially interested parties, some traders think Horizon Pharma PLC (NASDAQ:HZNP) could be among the candidates. Horizon had tried to merge with Depomed before in an equity deal, which was rejected. The two companies share some similarities and the management could unlock noticeable synergies if a merger were to occur. In May 2016, a Horizon spokesman said:
“If the Depomed board chose to offer Depomed for sale, and invited Horizon to participate in the bidding, Horizon would evaluate the opportunity anew, as it would any potential acquisition.”
According to our data, the smart money is rather bullish on both companies. Of the around 750 funds that we track, 23 owned $328.2 million worth of Depomed Inc (NASDAQ:DEPO)’s stock, which accounted for 27.40% of the float on June 30, while 27 had long stakes in Horizon Pharma PLC (NASDAQ:HZNP) worth $648.36 million in aggregate, which represented 24.50% of Horizon’s float.
On the next page, we find out why Oracle, Novavax and Fiat Chrysler Automobiles NV are in the spotlight.