All three major indexes are in the green as Deutsche Bank AG (USA) (NYSE:DB) worries fade. Shares of the German investment bank are up over 12% on news of a potential settlement, helping other financial stocks do well. Throw in the fact that many energy stocks are also up, and it’s not hard to see the market closing the third quarter with a good showing.
In this article, we will analyze five stocks that are on the move today, Emergent Biosolutions Inc (NYSE:EBS), Vectrus Inc (NYSE:VEC), Cognizant Technology Solutions Corp (NASDAQ:CTSH), Delcath Systems, Inc. (NASDAQ:DCTH), and Nova Lifestyle Inc (NASDAQ:NVFY). In addition, we will see how the smart money is positioned towards each stock.
Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see the details here).
Emergent Biosolutions Inc (NYSE:EBS) shares are 12% in the green after the company provided an update on the status of its 2011 BioThrax procurement contract due to expire today. According to the company, the CDC has exercised an option to procure all remaining BioTrax doses, and thereby committed to take delivery of the full 44.75 million doses spelled out under the contract. Emergent is also in ‘active negotiations’ with the CDC with respect to a follow-on procurement contract that hasn’t yet been finalized. Also today, Emergent announced that it had signed a multi-year contract with the Biomedical Advanced Research and Development Authority for the advanced development and delivery of an anthrax vaccine candidate, NuThrax. The contract consists of a five year base period of performance valued at around $200 million to develop NuThrax and procurement options for the company to potentially realize up to $1.4 billion in sales more depending on the deliveries. The company anticipates the FDA could authorize NuThrax for emergency use as early as 2018. Jim Simons’ Renaissance Technologies raised its stake in Emergent Biosolutions Inc (NYSE:EBS) by 15% in the second quarter to 1.27 million shares held at the end of June.
Vectrus Inc (NYSE:VEC) shares have retreated by over 45% after the company disclosed that the U.S. government did not select its contract proposal to provide comprehensive support services for all U.S. Army facilities in Kuwait. Vectrus is currently the incumbent contractor providing these services, and its contract runs through December 28 before expiring. According to our data, the number of funds with holdings in Vectrus Inc (NYSE:VEC) rose by one quarter-over-quarter to 13 at the end of June.
On the next page, we will examine why traders are buying and selling Cognizant Technology Solutions Corp, Delcath Systems, and Nova Lifestyle.