Wall Street opened higher today with the three major indexes moving into the green territory. At the same time, shares of Live Ventures Inc (NASDAQ:LIVE), C&J Energy Services, Ltd. (NYSE:CJES), and Williams Companies Inc (NYSE:WMB) are trading slightly higher. So let’s find out why investors are bullish on these three stocks today and examine the hedge fund sentiment towards these stocks.
At Insider Monkey, we track hedge funds and prominent investors because our research has shown that historically their stock picks delivered superior risk-adjusted returns. This is especially true in the small-cap space. The 50 most popular large-cap stocks among hedge funds had a monthly alpha of about 6 basis points per month between 1999 and 2012; however the 15 most popular small-cap stocks delivered a monthly alpha of 80 basis points during the same period. This means investors would have generated 10 percentage points of alpha per year simply by imitating hedge funds’ top 15 small-cap ideas. We have been tracking the performance of these stocks since the end of August 2012 in real time and these stocks beat the market by 53 percentage points (102% return vs. S&P 500’s 47% gain) over the last 37 months (see the details here).
Live Ventures Inc (NASDAQ:LIVE)’s stock has advanced by 22.5% after the company reported its results for the fourth quarter of fiscal 2015, which was the first profitable quarter in the last 27 ones. The diversified growth holding company posted an adjusted EBITDA of $2.0 million, reversing the loss in the same period of the last fiscal year. Furthermore, revenue rose by 450.2% year-over-year to $18.1 million. Moreover, management expects better financial performance in the next quarters. Among the funds we track, the number of funds long the stock increased to 3 from 2 during the third quarter. Together, they hold some 0.3% of the company’s common stock as of September 30. Cliff Asness‘s AQR Capital Management is the largest shareholder of Live Ventures, having reduced its position by 58% during the third quarter to 23,792 shares.
Oil prices are trading lower, at the lowest level since 2009, in a market still immersed in pessimism by oversupply and doubts about demand. Moreover, recently, the Organization of Petroleum Exporting Countries (OPEC) has decided to postpone the decision to cut production.
However, despite the drop of the oil, C&J Energy Services, Ltd. (NYSE:CJES)’s stock has gained over 3% so far, continuing the increase registered yesterday. On December 3, analysts at Jefferies Group reiterated a ‘Buy’ rating on the stock, but lowered their price target to $15 from $18. However, Jefferies Group’s price objective suggests a potential upside of about 200% from the current levels. During the third quarter, C&J Energy Services, Ltd. (NYSE:CJES) lost some support from the smart money investors that we track, as the number of them invested in the stock decreased to 19 from 20; they amassed around 15.9% of the company at the end of September. Anand Parekh‘s Alyeska Investment Group holds the largest stake in Summit Materials, which contains 8.99 million shares, comprising 0.4% of its 13F portfolio.
Another energy stock, Williams Companies Inc (NYSE:WMB) has inched up. Analysts at Jefferies Group jave recently reaffirmed their ‘Hold’ rating and $35 on the stock, which implies an upside potential of around 18%. Among the funds from our database, Keith Meister´s Corvex Capital remained the largest shareholder of Williams Companies Inc (NYSE:WMB) at the end of September. In its latest 13F filing, the fund reported ownership of 41.68 million shares worth $1.54 million. Overall, the number of funds with long positions stood at 73 at the end of September, down from 86 three months earlier. These funds held in aggregate 21.9% of the company’s outstanding stock.