The markets have shaken off their negative trend as major indices are trading in the green zone. The markets are upbeat despite the news of unexpected increase in trade deficit for the month of August. However, the markets are also impacted by stocks making strong moves.
Some of the stocks which are pushing up the indices higher are Catalyst Pharmaceuticals Inc. (NASDAQ:CPRX), Resolute Energy Corporation (NYSE:REN), Nutanix Inc. (NASDAQ:NTNX), BioTelemetry Inc. (NASDAQ:BEAT), and Acacia Communications Inc. (NASDAQ:ACIA). In this article, we are going to take a closer look at the developments that pushed these stocks higher and we will assess the collective hedge fund sentiment towards them, based on data from the last 13F filings of some 749 investors in our database.
We believe that imitating hedge funds and other large institutional investors can be helpful in identifying stocks capable of outperforming the broader market. Through extensive research that covered portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see more details here).
Catalyst Pharmaceuticals Inc. (NASDAQ:CPRX)’s stock has surged by nearly 40% on the back of an analyst upgrade. Piper Jaffray upgraded the stock to ‘Overweight’ from Neutral and boosted the price target to $4 from $1 per share. In a note, the analysts suggested that the company is likely to benefit from its lead candidate Firdapse. Among the funds we track, six funds held $11 million worth of Catalyst’s stock in aggregate at the end of June, having amassed 19.80% of its outstanding stock, compared to nine investors that held $20 million worth of stock a quarter earlier.
Resolute Energy Corporation (NYSE:REN)’s stock has surged by around 14% after the company announced its acquisition of Delaware Basin assets, in pursuance to its definitive agreement with Firewheel Energy LLC. The deal is expected to be worth $135 million, including $90 million in cash. Resolute Energy has conducted a private offering of its preference shares to finance a part of the deal. The number of funds from our database long Resolute Energy was at six in the quarter ending June. The total value of their holdings stood at $9 million, in comparison to $10 million held by four funds at the end of previous quarter. This is almost 20.50% of its outstanding stocks.
On the next page, we are going to discuss the news that sent higher the shares of Nutanix, BioTelemetry, and Acacia Communications.