Five Stocks that Are Registering Gains on Wednesday for Various Reasons

Shares of KLA-Tencor Corp (NASDAQ:KLAC), Applied Materials, Inc. (NASDAQ:AMAT), Tupperware Brands Corporation (NYSE:TUP), and Intuitive Surgical, Inc. (NASDAQ:ISRG) are surging for various reasons on Wednesday. Let’s analyze why.

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KLA-Tencor Corp (NASDAQ:KLAC) is up by 23.2% after the company announced Lam Research Corporation (NASDAQ:LRCX) will acquire it for $32 in cash per share and 0.5 shares of Lam Research for each share of KLA-Tenor. The transaction values KLA-Tencor Corp (NASDAQ:KLAC) at $67.02 per share based on the closing price of Lam Research on Tuesday. There have been a spate of technology mergers in recent quarters as the era of cheap debt comes to an end. Lam’s acquisition of KLA-Tenor is just the latest in a long line of deals that should consolidate the industry and reduce oversupply. Management estimates the deal will yield $250 million in annual cost savings within two years of the deal’s close. The deal could also give the combined company more pricing power over its customers.

Applied Materials, Inc. (NASDAQ:AMAT) inched up by 1% after Intel Corporation (NASDAQ:INTC) announced it will spend up to $5.5 billion on flash memory investments in China ‘over the coming years’. Applied Materials, Inc. (NASDAQ:AMAT) helps companies make the latest and greatest NAND flash technology and will likely garner a substantial part of Intel’s additional spending. Shares of the company haven’t done very well, down over 33% year-to-date, but trade at a forward P/E of 12.17. Of the around 730 elite funds we track, 65 funds owned $2.47 billion of the company’s shares (accounting for 10.50% of the float) on June 30, versus 81 funds and $4.36 billion on March 31. Larry Robbins‘ Glenview Capital held 21.28 million shares of the company at the end of June.

On the next page, we analyze why Tupperware and Intuitive Surgical are surging.

Tupperware Brands Corporation (NYSE:TUP) rallied 11% after the company had reported third-quarter earnings of $0.79 per share on revenues of $521 million, beating estimates by $0.08 and $5.29 million, respectively. Gross margin increased 2.4 percentage points to 66.9%, while revenue in local currency increased by 7% year-over-year. Guidance was solid, with management expecting adjusted EPS of $4.39 – $4.44 for fiscal year 2015. Given the forward P/E of 11.6 and dividend yield of 4.93%, shares look reasonably valued, but hedge funds are cautious. A total of 16 funds in our database owned $183.15 million of the company’s shares, or 5.70% of the float, on June 30. Currently, some 14.22% of Tupperware Brands Corporation (NYSE:TUP)’s float is short, with hedge funds likely accounting for a substantial percentage of the short positions.

Intuitive Surgical, Inc. (NASDAQ:ISRG) is up by 6.82% after reporting third quarter earnings of $5.24 per share on revenues of $590 million, exceeding estimates by $1.01 and $9.63 million, respectively. The Da Vinci shipments rose 5.4% year-over-year, while global Da Vinci procedures grew by 15% year-over-year. EPS increased by 31.3% year-over-year. Hedge funds are ambivalent on Intuitive Surgical, Inc. (NASDAQ:ISRG), as 32 funds owned $842.83 million of the company’s shares (representing 4.70% of the float) on June 30, up slightly from 33 funds and $1.11 billion on March 31.

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