Why Are Investors Piling Into These Stocks Today?

Ocean Rig Higher on Follow-On Momentum

Ocean Rig UDW Inc (NASDAQ:ORIG) is over one-fifth higher today as momentum traders buy on yesterday’s news that the company agreed to acquire an ultra-deepwater drillship for less than one-tenth of its build price. Also helping today’s rally is the fact that crude prices have rallied by another 3%. If crude prices can sustain their rally for another $20 per barrel in gains, day-rates and demand for deepwater drillships will rise substantially. The number of shareholders of Ocean Rig UDW Inc (NASDAQ:ORIG) among the investors in our system fell by three during the fourth quarter to 12 by the end of December. Those 12 funds owned 19.5% of Ocean Rig’s float.

Shareholders Applaud Sonic Automotive’s Latest Quarterly Results

Sonic Automotive Inc (NYSE:SAH) shares have rallied by 15% after the company reported its latest financial results. For the first quarter, Sonic Automotive earned $0.39 per share on sales of $2.23 billion, meeting earnings estimates but falling short of top-line expectations by $90 million. Although the company’s new vehicle same-store sales inched lower by 2.1% year-over-year, Sonic’s used vehicle same-store sales rose by 2.3%. Gross margin rose by 40 basis points to 15.4%. The company maintains its guidance of adjusted diluted EPS from continuing operations of $2.07-to-$2.17 per share for 2016. The number of top funds that we track who held shares of Sonic Automotive Inc (NYSE:SAH) fell to 12 from 20 during the last quarter of 2015.

Ethan Allen Interiors Turns in Excellent Quarter

Ethan Allen Interiors Inc. (NYSE:ETH) did better than the consensus for its third quarter of fiscal year 2016, with EPS of $0.34 on sales of $190.6 million, beating analysts’ estimates by $0.04 per share and $7.56 million respectively. Retail net sales rose by 17.5%, driven by a comparable-store net sales increase of 18.6% year-over-year. Total revenue rose by 10% year-over-year. CEO Farooq Kathwari expanded on the results in a press release:

“The operating leverage of our vertically integrated structure resulted in our adjusted operating earnings increasing 55.0%. Adjusted earnings per share increased by 88.9%, which was also benefited by lower interest expense.” Mr. Kathwari continued, “We are making very good progress with repositioning our product offerings, our interior design network, making technology enhancements and improvements in our manufacturing, sourcing and logistics. We remain cautiously optimistic.”

Ethan Allen Interiors Inc. (NYSE:ETH) shares are 11% higher on the earnings report. That’s sure to make the 15 funds in our system who owned shares of Ethan Allen Interiors at the end of December happy.

Disclosure: None