Why Isle of Capri Casinos (ISLE) and KB Home (KBH) Are Among Today’s Gaining Stocks

Stock markets around the world rebounded with rise in oil prices and gains in commodity markets. Oil prices increased today after couple of weeks low after the consent over the deal to stabilize the crude market by the OPEC and non-OPEC producers. The clashes in Libya too fuelled the current rise in prices as it disrupted crude exports. Markets have gained momentum with some positives on the crude and commodity markets.

Let us look at some stocks that feature among the gainers today, including Isle of Capri Casinos (NASDAQ:ISLE), KB Home (NYSE:KBH), Geron Corporation (NASDAQ:GERN), Everbridge Inc. (NASDAQ:EVBG), and Eldorado Resorts Inc (NASDAQ:ERI). Aside from assessing the latest developments surrounding these stocks, we are also going to see how the investors we track were positioned towards them at the beginning of this quarter.

At Insider Monkey, we track around 740 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details about our small-cap strategy).

Isle of Capri Casinos (NASDAQ:ISLE)’s stock has jumped by 31.4% on the back of the announcement of its acquisition by Eldorado Resorts Inc (NASDAQ:ERI). The company entered into a definitive agreement to be acquired by Eldorado Resorts for $23 per share in cash or 1.638 shares of Eldorado stock, which brings the total value of the deal to $1.7 billion including debt. The deal includes 58% of the purchase price in cash and 42% in stock. The shareholders of Isle of Capri will own about 38% of the combined companies’ outstanding shares after the deal is closed. The transaction will assume $929 million in long-term debt from Isle of Capri and it is expected to be completed in the first quarter of 2017.  The combined company is expected to have 20 properties in 10 states and $1.8 billion in revenue for its year end 2017. A total of 22 funds among those that we track held $138 million worth of Isle of Capri shares at the end of June, up from 21 funds and $97 million, respectively, a quarter earlier. At the same time, 22 funds we track held 23% of Eldorado resort’s outstanding shares, valued at about $166 million at the end of the second quarter.

KB Home (NYSE:KBH)’s shares are up by over 4% following Buckingham Research’s upgrade of KB Home’s stock to ‘Buy’ from ‘Neutral’. The update from Buckingham Research five days after MKM Partners had reiterated its “Neutral” rating and and set a $13 price target on the stock before it reports its quarterly performance tomorrow. Analysts are expecting earnings and revenue at around $0.39 per share and $944.14 million, respectively. Of the funds we track, 16 held a total of $136 million of KB Home stock at the end of June, which represented almost 11% of its total outstanding shares.

Shares of Geron Corporation (NASDAQ:GERN) have gained around 7.45% so far today, on the back of the announcement of a license agreement with existing partner Janssen Pharmaceuticals, Inc. The agreement granted Janssen with exclusive worldwide rights under Geron’s proprietary patents and related know-how for the development and commercialization of its products, which are based around specialized oligonucleotide backbone chemistry and novel amidates for ribonucleic acid interference. Geron will be paid non-refundable upfront payment of $5 million for the licence agreement and another $75 million in milestone payments. A total of 11 funds we track held about $5 million of Geron shares at the end of June, down from 12 funds and $8.5 million, respectively, a quarter earlier.

The stock of Everbridge Inc. (NASDAQ:EVBG) has soared 17.73% today as the stock commenced its trading today following an IPO. The trading volume was at 1.8 million shares and day’s range stood at $11.76 – $18.73. The company offered for sale around 7.50 million shares at $12 per share. Everbridge Inc. (NASDAQ:EVBG) is a software that provides communication and enterprise safety applications. It had a revenue of $35.6 million and a net loss of $6.0 million in the first six months of 2016.

Disclosure: none