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Why Synacor, Atlas Air, Tutor Perini and EP Energy Are Up By Double-Digits Today

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U.S stocks, which were up on Thursday until the early afternoon, driven initially by a spike in oil prices and energy stocks, are now slightly down, ahead of this Friday’s U.S jobs data announcement. However, as usual, a few stocks are moving up sharply, largely on earnings reports. Among them are Synacor Inc (NASDAQ:SYNC), Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW), Tutor Perini Corp (NYSE:TPC), EP Energy Corp (NYSE:EPE), and Masimo Corporation (NASDAQ:MASI). Let’s check out why these stocks are surging today and see what the funds in our database think about 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).

Synacor Doubles on New Yahoo Deal

Let’s start with Synacor Inc (NASDAQ:SYNC), which is up by more than 118% today on roughly 270-times its regular trading volume, on the news that AT&T Inc. (NYSE:T) has decided to terminate its 15-year-old hosting partnership with Yahoo! Inc. (NASDAQ:YHOO), moving most of its business (except for email services) elsewhere. Under the new scheme, Synacor will host AT&T’s web and mobile portals, which could result in approximately $100 million in annual revenue for Synacor, starting in 2017. It should be noted that, as of Wednesday afternoon, the company’s market cap had still only reached $42.3 million.

As with most nano-caps, Synacor Inc (NASDAQ:SYNC) did not count many hedge fund supporters at the end of the fourth quarter of 2015. Among the firms in our database, only two were long the stock at that time. Phil Frohlich’s Prescott Group Capital Management held 1.18 million shares of the company as of March 31.

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Atlas Air & Amazon Ink a New Deal

Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW) is also up on a new deal with a major company, following the signing of a new agreement with Amazon.com, Inc. (NASDAQ:AMZN). Under the terms of the deal, Atlas Air will provide the online retailer with air cargo services through its 20 Boeing 767-300 converted freighters. In addition, the contract stipulates that Amazon was given warrants to acquire 20% of Atlas Air’s stock, at a price of $37.50 per share, with an option to purchase an additional 10%. Shares of Atlas Air have gained about 27% today.

At the end of 2015, 14 funds in our database were long Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW), holding 9% of its outstanding shares.

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We’ll dive into three more stocks and their gains today on the next page.

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