Why Are Investors Diving Headlong Into These 4 Stocks Today?

With cold weather blanketing many parts of the U.S on the 13th day of the month, the broader market is in a chilly mood as well, as all three major indexes are now in the red or roughly flat this morning. Among the stocks doing well are Qunar Cayman Islands Ltd (NASDAQ:QUNR), Nobilis Health Corp (NYSEMKT:HLTH), Shaw Communications Inc (USA) (NYSE:SJR), and AEGON N.V. (ADR) (NYSE:AEG). Let’s find out why investors are buying these stocks and analyze how hedge funds have felt about them of late.

In the eyes of most traders, hedge funds are assumed to be underperforming, old investment tools of the past. While there are more than 8,000 funds in operation at present, hedge fund experts at Insider Monkey look at the aristocrats of this group, around 730 funds. Contrary to popular belief, Insider Monkey’s research revealed that hedge funds underperformed in recent years because of their short positions as well as the huge fees that they charge. Hedge funds managed to outperform the market on the long side of their portfolios (see the details here).

Qunar Cayman Islands Ltd (NASDAQ:QUNR) and Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) are moving closer together as Ctrip.com recently issued the following press release:

“The Company has agreed to make certain investments, in the form of limited partnership capital contribution or other financing arrangements, in several non-U.S. investment entities, which are managed or owned by parties unaffiliated with each other and unaffiliated with the Company and are dedicated to investing in businesses in China. The Company is authorized to invest an aggregate of approximately US$1.3 billion in cash and to issue a total number of approximately 5.4 million ordinary shares, including 2,661,967 ordinary shares registered through a “shelf takedown” prospectus supplement filed on January 12, 2016 which became effective immediately pursuant to Ctrip’s effective shelf registration statement on Form F-3 (Registration No. 333-208399) filed in December 2015, to these non-U.S. investment entities. Ctrip is aware that these investment entities will acquire a significant minority stake of Qunar Cayman Islands Limited, or Qunar, from Qunar’s shareholders through privately negotiated transactions, using cash and/or Ctrip’s ordinary shares as purchase consideration.”

Although Ctrip didn’t say how much it would acquire of Qunar besides ‘a significant minority stake’, Qunar Cayman Islands Ltd (NASDAQ:QUNR) investors took the statement as a sign of more demand ahead and sent shares up by 11% in morning trading. The number of elite funds holding Qunar fell by five during the third quarter to 24 as of September 30.

Shares of micro-cap Nobilis Health Corp (NYSEMKT:HLTH) are in the green following the news that the company has restated its third-quarter 2015 earnings per share to show a profit of $0.14 per share, on revenue of $52.5 million. Those numbers were evidently higher than market expectations, as Nobilis Health Corp (NYSEMKT:HLTH) shares are almost 20% higher this morning. Due to certain errors, Nobilis plans to restate its quarterly results for the first and second-quarters of 2015 as well, in addition to its 2014 10-K. The number of elite funds with holdings in the stock rose by one during the September quarter to six.

On the next page, we examine the deal between Shaw Communications Inc (USA) and Corus Entertainment Inc (USA), as well as why AEGON NV (ADR) shares are spiking.

In welcome news, Shaw Communications Inc (USA) (NYSE:SJR) is selling its media assets to Corus Entertainment Inc. (USA) (CJREF) for C$2.65 billion or US$1.9 billion in a deal that should close in the third quarter. Shaw Communications Inc (USA) (NYSE:SJR) is selling its media unit to fund its Wind Mobile acquisition in a move that analysts believe will improve management’s focus and unlock long-term value for shareholders. Cliff Asness‘ AQR Capital Management and Jim Simons‘ Renaissance Technologies are among the 15 elite funds that hold shares of Shaw Communications as of the end of the third quarter. Shaw shares are 7.6% higher today on the news.

Not to be left out, AEGON N.V. (ADR) (NYSE:AEG) has rallied 8% today on word that it plans to repurchase EUR400 million (or US$432 million) of its stock and cut costs to improve its returns on capital. Management plans to trim expenses in its U.S and Dutch units by EUR200 million by 2018 and is targeting a return on equity of 10%.  Of the 730 elite funds that we track, six of those owned $12.09 million worth of AEGON N.V. (ADR) (NYSE:AEG) shares (accounting for just 0.10% of the float) on September 30, down from seven funds owning $38.41 million worth of shares on June 30.

Disclosure: None