Oil is up by more than 5% on Wednesday, and the markets are accompanying its surge, with all major U.S stock indexes trading up in early afternoon trading. Among the stocks posting the most significant gains we can count DragonWave, Inc.(USA) (NASDAQ:DRWI), Momo Inc (ADR) (NASDAQ:MOMO), Primerica, Inc. (NYSE:PRI), Acuity Brands, Inc. (NYSE:AYI), and Global Payments Inc (NYSE:GPN). Let’s take a look into the events that have pushed these stocks higher and see what the funds in our database think about the companies in question.
Our research determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor beat the S&P 500 by around 95 basis points per month (see more details here).
Let’s start with DragonWave, Inc.(USA) (NASDAQ:DRWI), a nano-cap, high-capacity packet microwave solutions provider that is trading up by more than 5% on Wednesday afternoon. The surge looks like a continuation of the 46.96% rise seen on Tuesday and the monstrous 317% spike witnessed since March 28, which was driven by the launch of its Harmony Care services offering, which will provide legacy support to the company’s installed base of more than 400,000 units. This product will allow customers to “extend the lifecycle of their installed microwave base products.”
As with most nano-caps, DragonWave, Inc.(USA) (NASDAQ:DRWI) does not count the support of many hedge funds. In fact, only two firms among those we track were long the stock at the end of 2015. Among them was Jim Simons’ Renaissance Technologies, one of the largest shareholders of record, which last held $89,000 worth of the company’s stock on December 31.
Next up is Momo Inc (ADR) (NASDAQ:MOMO), which has gained almost 34% since the bell rang this morning, registering its largest surge since its December 2014 IPO. Earlier today, a 13D filing revealed that Alibaba Group Holding Ltd (NYSE:BABA)’s finance affiliates have joined the group that is trying to buy out the social networking platform. Henry Guo, an analyst at Investment Technology Group, told Bloomberg that “Today’s announcement renewed hopes of Momo’s privatization… With Alibaba on board it shows that money is no longer a problem.”
Momo Inc (ADR) (NASDAQ:MOMO) counts a few more institutional supporters than DragonWave. Nine funds in our database were long the stock at the end of the fourth quarter, with their combined stakes accounting for more than 14.5% of the company’s total shares. The largest position among those investors was held by Lei Zhang‘s Hillhouse Capital Management, consisting of 4.88 million shares valued at $78.2 million.
We’ll uncover the reasons why three other stocks are making huge moves today on the next page.