Here’s Why These Five Stocks Are on the Move Today

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.Cognizant Technology Solutions Corp (NASDAQ:CTSH) is 13% in the red after the company said in an 8-K filing with the SEC that it is conducting an internal investigation as to whether certain payments relating to facilities in India were made in possible violation of the U.S. Foreign Corrupt Practices Act. The company has voluntarily notified the DoJ and SEC. In addition, the company announced that Gordon Coburn has resigned from his position as President of the company and will be replaced by Rajeev Mehta. The smart money sentiment towards Cognizant Technology Solutions Corp (NASDAQ:CTSH) was relatively stable in the second quarter, as 40 funds from our database were long Cognizant Technology Solutions Corp (NASDAQ:CTSH) at the end of June, up by two funds from the previous quarter.

Delcath Systems, Inc. (NASDAQ:DCTH) shares have retreated by 26% after the company priced its public offering of 425,000 shares of common stock plus additional warrants at $3 per share plus fraction of warrant. Buying a common share at the offering also entitles buyers to 0.35 warrants to purchase an additional share of common stock at an initial exercise price of $3 per share with a term of five years. The number of investors tracked by us with holdings in Delcath Systems, Inc. (NASDAQ:DCTH) fell by one quarter-over-quarter to two at the end of June.

Last but not least, Nova Lifestyle Inc (NASDAQ:NVFY) is up by over 35% after the company signed a share transfer agreement to sell its China-based subsidiaries to Kuka Design Limited for an aggregate purchase price of $8.5 million. CEO Jeffrey Wong said:

“We feel this is truly a win-win for both Kuka Design BVI and Nova LifeStyle, as this transaction will allow our Company to focus its entire attention on designing, developing, branding, marketing and distribution of furniture products and the fast growing e-commerce market…We intend for the transaction process to continue over the next month and will keep investors apprised of our progress.”

The transaction is expected to be consummated by October 30, 2016 if all goes well. None of the funds tracked by Insider Monkey held shares of Nova Lifestyle Inc (NASDAQ:NVFY) at the end of the second quarter.

Disclosure: none