Why Are Investors Excited About These Five Stocks Today?

With all three indices in the red today, shares of Cadiz Inc (NASDAQ:CDZI), Giga-tronics, Incorporated (NASDAQ:GIGA), MeetMe Inc (NASDAQ:MEET), Solaredge Technologies Inc (NASDAQ:SEDG) and Universal Display Corporation (NASDAQ:OLED) are well in the green. Let’s find out why investors are buying these five stocks today. We are also going to assess the hedge fund sentiment towards these stocks.

We pay attention to hedge funds’ moves because our research has shown that hedge funds are extremely talented at picking stocks on the long side of their portfolios. It is true that hedge fund investors have been underperforming the market in recent years. However, this was mainly because hedge funds’ short stock picks lost a ton of money during the bull market that started in March 2009. Hedge fund investors also paid an arm and a leg for the services that they received. We have been tracking the performance of hedge funds’ 15 most popular small-cap stock picks in real time since the end of August 2012. These stocks have returned 102% since then and outperformed the S&P 500 Index by around 53 percentage points (see more details here). That’s why we believe it is important to pay attention to the hedge fund sentiment; we also don’t like paying huge fees.

In Wednesday intraday trading, Cadiz Inc (NASDAQ:CDZI)’s stock is up by nearly 30% after the company entered into a lease agreement with Water Asset Management (WAM). Under the agreement, WAM will lease 2,100 acres owned by Cadiz in San Bernardino County, California, to be used for various purposes, such as planting, growing and harvesting of crops. Cadiz will receive a one-time payment of $12 million. Both companies also agreed that Cadiz can negotiate exclusively with WAM another future lease of 7,500 acres for a proposed price of $43 million. Hedge fund sentiment towards Cadiz Inc (NASDAQ:CDZI) has been steady, as the number of hedge funds long the stock (among those we follow) remained unchanged, at six, at the end of the third quarter. Moreover, these funds amassed 15.60% of the company’s outstanding stock heading into the fourth quarter. Crispin Odey‘s Odey Asset Management reported owning 2.1 million shares of Cadiz Inc (NASDAQ:CDZI) in its latest 13F filing, having increased its stake by 9% over the quarter.

Moving on, Giga-tronics, Incorporated (NASDAQ:GIGA) shares have surged by 21% on Wednesday. At the beginning of the month, the company announced a license agreement with Lockheed Martin Corporation (NYSE:LMT), but the financial conditions of the accord were not disclosed. Among the funds we follow, Giga-tronics, Incorporated (NASDAQ:GIGA) is not very popular with only two funds reporting long positions in the last round of 13F filings, amassing some 2.0% of its outstanding stock. Jim Simons‘ Renaissance Technologies owned 102,200 shares at the end of September.

Next on our list of intraday gainers is MeetMe Inc (NASDAQ:MEET), whose shares are up by 7% after the social network announced a record of more than 30 million chats in one single day. This movement makes the stock trades nearly its 52-week high. MeetMe Inc (NASDAQ:MEET) registered a decrease in popularity among smart money investors, with only four funds holding long positions at the end of the third quarter, versus seven funds three months earlier. Joseph A. Jolson‘s Harvest Capital Strategies was the largest shareholder with 4.6 million shares, valued at $7.27 million at the end of September, accounting for 1.3% of its total 13F portfolio.

 

Solaredge Technologies Inc (NASDAQ:SEDG) shares are up by 5% today, extending its rally that started around two weeks ago on the back of solar tax credit extension news. Analysts are also gaining more optimism and for the current quarter, EPS estimations have increased to $0.34 from $0.33 per share, as well as full-year estimates went up to $1.41 from $1.38 per share. Among the funds we follow, 16 reported long positions in Solaredge Technologies as of the end of September, down by one fund from a quarter earlier.

Finally, in our list of intraday gainers is Universal Display Corporation (NASDAQ:OLED), whose shares have surged about 7% amid reports that Apple Inc. (NASDAQ:AAPL) will use OLED screens in their future iPhone models. Our data show that 14 funds in our database were long Universal Display Corporation (NASDAQ:OLED) at the end of September, up from 13 funds at the end of June. Together they hold some 15% of the company’s common stock while Rob Citrone‘s Discovery Capital Management is the largest shareholder, owning 4.18 million shares valued at $141.7 million as of the end of September.

Disclosure: none