Here’s Why Mylan, Diamondback Energy, TESARO and Two Other Stocks Are Surging Today

Climbing oil prices and polls suggesting Hillary Clinton’s success in the second presidential debate are favoring the market sentiment on Monday, as all three indices are trading in the green today.

Among the most notable gainers today are IntelliPharmaCeutics Intl Inc (USA) (NASDAQ:IPCI), Mylan NV (NASDAQ:MYL), Mobileiron Inc (NASDAQ:MOBL), TESARO Inc (NASDAQ:TSRO), and Diamondback Energy Inc (NASDAQ:FANG). Let’s find out why these stocks are advancing today, and take a look at the hedge fund sentiment towards them based on the last 13F filings of some 740 funds we track.

Academic research has shown that certain insider purchases historically outperformed the market by an average of seven percentage points per year. This effect is more pronounced in small-cap stocks. Another exception is the small-cap stock picks of hedge funds. Our research has shown that imitating the 15 most popular small-cap stocks among hedge funds outperformed the market by nearly a percentage point per month between 1999 and 2012 (read more details here).

IntelliPharmaCeutics Receives Tentative FDA Approval

Shares of Canadian pharmaceutical company IntelliPharmaCeutics Intl Inc (USA) (NASDAQ:IPCI) have surged by more than 19% after the company on Friday said it had received a tentative FDA approval for its abbreviated new drug application (ANDA) for quetiapine fumarate extended-release tablets. The drug is a generic equivalent for Seroquel XR, which is sold in the US by Astra Zeneca Pharmaceuticals, which has permitted IntelliPharmaCeutics to sell generic versions of the 50, 150, 200, 300 and 400 mg strengths of Seroquel XR after the final FDA approval. In a statement, IntelliPharmaCeutics CEO Dr. Isa Odidi said the tentative approval shows a “substantial commercial opportunity” for the company. Ken Griffin’s Citadel Investment Group owns 14,492 shares of the company as of the end of June.

Mylan Pays $465 Million to Settle EpiPen Controversy

Mylan NV (NASDAQ:MYL)’s stock has gained over 9% so far today after the company said it had agreed to pay $465 million to the Justice Department and other government agencies to settle the allegations according to which the company had overbilled Medicaid for its life-saving EpiPen. The settlement gives an all clear to the UK based medical company. Mylan has also lowered its 2016 adjusted earnings expectations $4.70-$4.90 per share, from $4.85-$5.15. Mylan has been under fire after it raised the price of EpiPen to more than $600 for a pack of two from about $100. A total of 44 funds tracked by Insider Monkey were long Mylan NV (NASDAQ:MYL) at the end of the second quarter, down from 51 funds a quarter earlier.

We will discuss the other three stocks that are trading well in the green on the next page.

Mobileiron Raises Third Quarter Guidance

Mobileiron Inc (NASDAQ:MOBL)’s stock has appreciated by over 18% after the company raised its third quarter guidance. The Mountain View, California-based company now expects gross billings to be in the range of $46.5 million to $47.5 million, above the prior guidance of $43-$45 million, while total revenue estimates are between $41 million and $42 million, compared to the previous forecast of $39-$41 million and a consensus analyst estimate of $40.41 million. Non-GAAP operating expenses are expected to be at the low end of $41-$43-million range. Mobileiron Inc (NASDAQ:MOBL) will announce third quarter results on October 27. Just eight funds from our database were bullish on Mobileiron Inc (NASDAQ:MOBL) at the end of June.

TESARO Shares Rising After Successful Cancer Study

Oncology-focused pharmaceutical company TESARO Inc (NASDAQ:TSRO)’s stock is going through the roof today, after the company’s ovarian cancer experimental drug Niraparib improved outcomes for all women with recurrent ovarian cancer in a clinical study. The drug stopped the disease progression, and prolonged the lives of the patients, according to a press release by the company. Niraparib basically inhibits enzymes involved in repairing damaged DNA, thus suppressing the cancer growth. Mansoor Raza Mirza, the leader of the clinical study said the drug is a breakthrough for patients with ovarian cancer, as such benefits in progression-free survival (PFS) in recurrent ovarian cancer pateitns have never been seen before. At the end of the second quarter, 28 funds in our database held shares of TESARO Inc (NASDAQ:TSRO), up from 19 funds a quarter earlier.

Diamondback Energy Raises 2016 Outlook

Diamondback Energy Inc (NASDAQ:FANG) shares have gained over 10% after the company announced preliminary third-quarter results, increased full fiscal 2016 guidance and also provided outlook for the next year. The Midland, Texas-based company’s average daily production during the quarter was 44,923 BOE/D (73% oil), a 22% rise on the quarter. For 2016, Diamondback Energy Inc (NASDAQ:FANG) expects to produce from 41,000 to 42.000 barrels of oil equivalent daily, which represents an increase of 6% from the midpoint of its July guidance. For 2017, the company sees a production growth of 30% at the midpoint of the updated 2016 range. Diamondback’s CEO Travis Stice said in a statement that the results show the company’s ability to turn its “growth engine” back on. The company also said it is no longer engaged in acquisition talks. Alec Litowitz and Ross Laser’s Magnetar Capital is one of 34 funds from our database that are bullish on Diamondback Energy Inc (NASDAQ:FANG) as of the end of the second quarter.

 

Disclosure: none