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Why Shares of Paragon, Newell, Seadrill, Pandora and Genworth Are Soaring Today

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While it is true that a few tech companies surprised investors, most of the largest ones posted disappointing quarterly results this week and for this earnings period in general. Driven by declining tech (and healthcare) stocks, the U.S market is in the red on Friday afternoon, on a day where oil also fell and European and Asian markets delivered even heftier losses. Following today’s drops, the S&P and Dow are poised to close the month not with a bang, but with a whimper, at nearly the same levels where they started it, while the Nasdaq will have lost more than 2%. However, a few stocks are moving up heartily today. Among them we can count Newell Brands Inc (NYSE:NWL), Genworth Financial Inc (NYSE:GNW), Seadrill Ltd (NYSE:SDRL), Paragon Shipping Inc. (NASDAQ:PRGN), and Pandora Media Inc (NYSE:P). We’ll uncover why these stocks are being lifted higher today and see what the hedge funds in our database think about each of these companies.

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).

Sharpie Maker Up Sharply After Strong Earnings

Let’s start with Newell Brands Inc (NYSE:NWL), which is up by roughly 4.8% on Friday afternoon following the announcement of the company’s first quarter financial results. Before the market opened this morning, the firm that makes Sharpies, Parker pens, and Rubbermaid products, among others, posted EPS of $0.40, beating the Street’s consensus estimate by $0.03. While revenue was up by 4.8% year-over-year, to $1.32 billion, it did miss estimates by $130 million. However, investors do not seem very worried about revenue, as EPS rose by 11.1% year-over-year, driven by core sales growth in all five of the company’s business segments, expanding operating margins, and a smaller float.

Among the funds that we track, 28 held long stakes in Newell Brands Inc (NYSE:NWL) as of the end of 2015. In this group, we could highlight Ken Griffin’s Citadel Investment Group, which declared owning 5.18 million shares of the company as of December 31.

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Genworth Posts its Largest Gain in 6 Years

An even larger gainer in Friday trading is Genworth Financial Inc (NYSE:GNW), which has risen by almost 16% since the bell rang this morning on the back of the announcement of its strong first quarter performance. After the market closed on Thursday, the company reported adjusted EPS of $0.21 per share for the quarter, $0.07 above the Street’s consensus. And, even though revenue of $1.785 billion fell well short of expectations of $2.175 billion, investors seemed satisfied with the operating profit and the fact that CEO Tom McInerney is working to free up capital to meet the company’s debt payments.

Genworth Financial Inc (NYSE:GNW) also counted 28 hedge fund supporters from among those in our database at the end of 2015. Quite recently, Himanshu H. Shah’s Shah Capital Management reported ownership of 4.69 million shares of the company as of March 31 after boosting its holding of the stock by 50% during the first quarter.

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Three more big gainers, Pandora among them, are discussed on the following page.

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