U.S. stocks are drawing in modest gains midday on Nov. 2, with some of the day’s active gainers from healthcare, technology, media and the food industries, pulling the Dow Jones Industrial Average and the S&P 500 into the green territory. However, several stocks have registered larger gains on the back of various developments and in this article, we are going to focus on four, namely, MedAssets, Inc. (NASDAQ:MDAS), Hutchinson Technology Incorporated (NASDAQ:HTCH), Eros International plc (NYSE:EROS), and VirtualScopics Inc (NASDAQ:VSCP). Let’s take a look at the news that caused these stocks to gain ground on Monday.
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Before we get to discussing the stocks, we should tell you a couple of things about our activity. At Insider Monkey, we track hedge funds’ moves in order to identify actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically underperformed the S&P 500 Total Return Index by an average of seven basis points per month between 1999 and 2012. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Index by an average of 95 basis points per month (read more details here). Since the official launch of our small-cap strategy in August 2012, it has performed just as predicted, returning over 102% and beating the market by more than 53 percentage points. We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise (while avoiding their high fees at the same time) rather than large-cap stocks.
On the heels of a disappointing third-quarter 2015 earnings report, healthcare solutions company MedAssets, Inc. (NASDAQ:MDAS) opened in green and is rallying by around 30%, amid a $2.7 billion deal, where investment manager Pamplona Capital Management will acquire MedAssets, Inc. (NASDAQ:MDAS) at $31.35 per share.
“Over the last year, our progress captured the attention of outside parties, and we received a number of unsolicited inquiries expressing interest in acquiring MedAssets.” the company’s Chairman and CEO R. Halsey Wise said.
The deal, Wise said, was the conclusion of a review of strategic alternatives of the management as well as its board of directors. The deal is expected to close early 2016. MedAssets, which reported a net loss of $2.2 million, or $0.04 cents per share for the third-quarter of 2015, will hold its earnings conference call and webcast at 5 p.m. ET today. Additionally, Piper Jaffray released an investment note upgrading MedAssets to “neutral” from “underweight”.
Hutchinson Technology Incorporated (NASDAQ:HTCH) has leaped 102.34% in thick trading, playing around $3.55 per share, midday, after TDK Corp. – a big player in the electronics industry – agreed to acquire the company. Shareholders of Hutchinson Technology are expected to receive up to $4 per share in cash if the deal closes. Under transaction terms, TDK will acquire all of the outstanding shares of common stock of Hutchinson Technology Incorporated (NASDAQ:HTCH) for a base consideration of $3.62 per share, and on top of that, a consideration of up to $0.38 per share under certain conditions.
Hutchinson Technology Incorporated (NASDAQ:HTCH) has also released its fourth-quarter 2015 earnings, which showed a widened net loss of $9.3 million, or $0.28 per share, compared to the $5.2 million net loss, or $0.18 per share, reported in the prior-year period.
On the following page we will discuss the other two companies, Eros International and VirtualScopics.
After a 24% plummet last week amid a controversy in the business activities of New Jersey-based Eros International plc (NYSE:EROS), the company rebounded by 20% in active midday trading. The drivers to its sales increase and its growing footprint in United Arab Emirates was called into question after recent a tweet from a user cried fraud on the spike in sales outside of its Indian market, Bloomberg reported last week. ros International plc (NYSE:EROS) responded today to clear the issues point by point. Additionally, the company’s audit committee retained law firm Skadden, Arps, Slate, Meagher & Flom LLP to conduct an independent internal review.
“Eros will survive this attack and emerge a winner in the long run..,” the company said in a released statement.
Wells Fargo’s analyst Eric Katz downgraded his rating of the Bollywood film producer and distributor to ‘Market Perform’, unsatisfied with the answers provided by the company. Among the investors, we track, ros International plc (NYSE:EROS) is not very popular, with just 14 funds holding stakes equal to 5% of the company as of the end of June.
VirtualScopics Inc (NASDAQ:VSCP) jumped after the bell and after a very volatile trading ended around 2% up. Over the last three months, VirtualScopics Inc (NASDAQ:VSCP)’s stock rallied by nearly 90%, and saw an all-time high on October 30 when it closed at $4.5 per share – after declining as far as $2.44 and soaring as high as $6.65 intraday. VirtualScopics Inc (NASDAQ:VSCP) provides quantitative imaging solutions, serving pharmaceutical, biotechnology and medical device industries.
Disclosure: None
