Crude futures are slightly lower today as traders await the latest API inventory report. Not surprisingly, all three indexes opened slightly in the red as investors digest the latest earnings releases.
Among the stocks traders are talking about today are Hudson Technologies, Inc. (NASDAQ:HDSN), Spirit Airlines Incorporated (NASDAQ:SAVE), Super Micro Computer, Inc. (NASDAQ:SMCI), DragonWave, Inc. (USA) (NASDAQ:DRWI), and Cobalt International Energy, Inc. (NYSE:CIE). Let’s take a closer look at the five stocks and see how elite funds are positioned towards them.
Hedge fund sentiment is an important metric for assessing the long-term profitability. At Insider Monkey, we track over 700 hedge funds, whose quarterly 13F filings we analyze and determine their collective sentiment towards several thousand stocks. However, our research has shown that the best strategy is to follow hedge funds into their small-cap picks. This approach can allow monthly returns of nearly 95 basis points above the market, as we determined through extensive backtests covering the period between 1999 and 2012 (see the details here).
Hudson Momentum Continues
A day after surging more than 8%, Hudson Technologies, Inc. (NASDAQ:HDSN) shares opened over 40% in the green. Traders are buying after the company announced that the United States Defense Logistics Agency has awarded the company, as a prime contractor, a five-year contract including a five year renewal option with an estimated maximum value of $400 million. The fixed price contract is for management and supply of various products such as compressed gases, refrigerants, cylinders, and other items. Management believes the award will contribute to considerable future revenue and earnings growth. Just two funds among those we track owned $10.68 million worth of Hudson Technologies, Inc. (NASDAQ:HDSN)’s stock, which accounted for 9.90% of the float on March 31.
Spirit Flies Lower on Guidance
Spirit Airlines Incorporated (NASDAQ:SAVE) shares are down by over 6% after the airline issued preliminary second quarter guidance numbers. For the quarter, management expects operating margin of around 22%, in-line with previous guidance, and a modest sequential decline in non-ticket revenue per passenger flight segment (PFS), with the airline reporting $51.32 in non-ticket sales per PFs. The total revenue per available seat mile number came in at the low end of the initial guided range and adjusted cost per available seat mile (CASM) excluding fuel is seen to have inched lower by 8% year-over-year. Among the funds from our database, 28 funds owned shares of Spirit Airlines Incorporated (NASDAQ:SAVE) at the end of the first quarter.
On the next page, we examine why Super Micro Computer, DragonWave, and Cobalt International Energy are trending today.