Wall Street is in bull mode today as all three major indexes are in the green, with the Dow rising 90 points, the S&P 500 increasing 0.5% and the NASDAQ inching up 0.4%. In addition crude futures have surged over 2% as investors look forward to the informal OPEC/Russia meeting later this month.
Among the stocks that have shown even more volatility than the indexes today are five stocks, Sarepta Therapeutics Inc (NASDAQ:SRPT), PTC Therapeutics, Inc. (NASDAQ:PTCT), Vical Incorporated (NASDAQ:VICL), CVR Refining LP (NYSE:CVRR), and WebMD Health Corp. (NASDAQ:WBMD). Let’s find out why traders are buying and selling and use the most-current 13F data to determine how the smart money is positioned among the five.
At Insider Monkey, we track around 730 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on, can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see the details here).
Sarepta Therapeutics Inc (NASDAQ:SRPT) shares have surged by over 90% today after the FDA granted accelerated approval to the company’s lead candidate for the treatment of Duchenne muscular dystrophy, eteplirsen, which will go by the branded name of Exondys 51. Under the accelerated approval process, Sarepta will have to conduct a clinical trial to confirm Exondys 51’s clinical benefit, specifically as it relates to the improvement of motor function of DMD patients with a confirmed mutation of the dystrophin gene amenable to exon 51 skipping. The FDA may initiate proceedings to withdraw approval of Exondys 51 if the trial fails to verify the clinical benefit. Given today’s price action though, it seems few traders are willing to bet on that outcome. According to our data, 20 funds we track were savvy enough to own shares of Sarepta Therapeutics Inc (NASDAQ:SRPT) at the end of the second quarter. That’s up by one fund from the end of the first quarter.
PTC Therapeutics, Inc. (NASDAQ:PTCT) shares are over 20% in the green today mostly due to the FDA granting accelerated approval to Sarepta’s eteplirsen, which is designed to treat Duchenne muscular dystrophy. PTC Therapeutics’ lead candidate is Translarna, which is a potential treatment of nonsense mutation Duchenne muscular dystrophy (DMD) in ambulatory patients. Given the rally, some traders think that the FDA’s approval of eteplirsen means that the probability of an eventual approval of Translarna is greater. A total of 13 funds from our database were long $22.28 million worth of PTC Therapeutics, Inc. (NASDAQ:PTCT)’s stock, which accounted for 9.20% of the float on June 30, including Stephen Dubois‘ Camber Capital Management which raised its stake by 68% in the second quarter to over 1.5 million shares.
On the next page, we examine why traders are trading Vical Incorporated, CVR Refining LP, and WebMD Health Corp.