Although St. Louis Federal Reserve President James Bullard recently said that holding interest rates too low for too long might aggravate inflation in the future, traders have largely brushed off the bearish comments and the three major indexes are mostly flat on the day. Among the stocks well in the green are Xura Inc (NASDAQ:MESG), MGT Capital Investments Inc. (NYSEMKT:MGT), Nanosphere, Inc. (NASDAQ:NSPH), Cellectar Biosciences Inc (NASDAQ:CLRB), and Relypsa Inc (NASDAQ:RLYP). Let’s find out why traders are piling into the five stocks and use data from the latest 13F filings to see how the world’s greatest investors are positioned towards these stocks.
Hedge fund sentiment is an important metric for assessing the long-term profitability. At Insider Monkey, we track over 760 hedge funds, whose quarterly 13F filings we analyze and determine their collective sentiment towards several thousand stocks. However, our research has shown that the best strategy is to follow hedge funds into their small-cap picks. This approach can allow monthly returns of nearly 95 basis points above the market, as we determined through extensive backtests covering the period between 1999 and 2012 (see the details here).
Xura Surges On Buyout
Xura Inc (NASDAQ:MESG) is 16% higher today after the company agreed to be acquired by the affiliates of Siris Capital Group for $25 per share in cash. The acquisition agreement has been unanimously approved by Xura’s Board of Directors and is expected to close in the third quarter of 2016. As with many other deals, Xura has a 45 day ‘go-shop’ period in which it can solicit alternative acquisition proposals from third parties. Of the around 766 elite funds Insider Monkey tracks, 17 owned shares of Xura Inc (NASDAQ:MESG) at the end of March.
Day Trader Favorite Stock Rallies Higher
Although its volatility may be noticeably lower than in previous sessions, MGT Capital Investments Inc. (NYSEMKT:MGT)’s shares are nevertheless trading 4.8% higher as day traders continue to bet on the stock’s upward momentum. Shares of MGT Capital Investments Inc. (NYSEMKT:MGT) started surging after it was announced that eccentric software security pioneer John McAfee will be the company’s new CEO a few weeks ago. As part of the leadership change, MGT Capital will change its name to John McAfee Global Technologies and will pivot to focus more on the security market. MGT Capital is a classic case of a low float stock that surges on increased media attention. Whether McAfee can work his wonders again at MGT is anyone’s guess, however. In other news, MGT also reported a first quarter loss of $0.07 per share. Cash used in operations was $376,000, down 49% sequentially from the December 2015 quarter, and down 41% year-over-year. As with all nano-caps, investors should do their due-diligence before buying.
On the next page, we examine Nanosphere, Cellectar Biosciences, and Relypsa.