Although speculation continues over when the Federal Reserve will hike interest rates, investors seem to have brushed aside concerns over a rate hike for the immediate future. All three major indexes are trading higher today amid some news in the M&A space. One of the mergers announced today is between Horizon Pharma PLC (NASDAQ:HZNP) and Raptor Pharmaceutical Corp. (NASDAQ:RPTP).
In this article, we are going to take a closer look at the deal between Horizon Pharma and Raptor Pharmaceuticals as well as three other stocks that are in the spotlight today on the back of other developments. In addition, we will assess the hedge fund sentiment towards each stock.
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).
As stated earlier, Horizon Pharma will acquire Raptor Pharmaceutical in a transaction valued at $9 per share or around $800 million in total. Raptor Pharmaceutical shareholders are getting a premium of 21% over the stock’s Friday’s closing price of $7.45. The companies are expected to close the deal by the fourth quarter of this year. The acquisition will help Horizon Pharma to focus on rare diseases and will also facilitate its foray into international markets including Europe. A total of 27 of investors tracked by us hold about $648 million worth of Horizon Pharma shares in aggregate as of the end of June, down from 35 funds and $887 million, respectively, a quarter earlier. At the same time, 15 funds reported stakes in Raptor Pharmaceutical with a total value of $95 million as of the end of June.
Amarin Corporation PLC (NASDAQ:AMRN)’s stock has lost around 6% so far today after the company reported that, pursuant to the review of its first pre-specified interim efficacy analysis for the REDUCE-IT cardiovascular outcomes study, the independent data monitoring company has recommended the continuation of the trial without any modification. The study analyzes the efficacy of Vascepa in reducing “cardiovascular events in patients who despite stabilized statin therapy have elevated triglyceride levels and other cardiovascular risk factors.” Among the hedge funds we track, 12 investors reported ownership of $32 million worth of Amarin shares, up from 10 funds a quarter earlier.
On the next page, we are going to discuss the latest events that put Manchester United PLC (NYSE:MANU) and Colgate-Palmolive Company (NYSE:CL) on investors’ radars today.