We have a trifecta of recent hedge fund buying activity for you to digest, featuring three different funds and three different stocks. We’ll kick it off with Stephen DuBois’s Camber Capital Management, which has disclosed a new position in Eagle Pharmaceuticals Inc (NASDAQ:EGRX), with 709,459 shares, amounting to 5.06% of their common shares. Then we’ll head on over to Hal Mintz’s Sabby Capital, where they’re buying up 7.58 million shares of Gevo, Inc. (NASDAQ:GEVO) and bringing their formidable total to 12,030,278, accounting for 9.05% of all common shares. Lastly, we’ll check in on Michael M. Rothenberg and David Sackler’s Moab Capital Partners, who seem to think Quality Distribution, Inc. (NASDAQ:QLTY) is not only a quality distributor, but also a quality stock; they’ve added 1.12 million shares to their holding in the company, bringing the total up to 1.51 million, which now represents a 5.37% stake.
Let’s start then with Camber Capital, the hedge fund with a penchant for investing in healthcare companies. They’ve now added another one to their portfolio in the form of Eagle Pharmaceuticals Inc (NASDAQ:EGRX). This follows a series of recent moves to build on some of their existing positions, including in medical equipment company Volcano Corporation (NASDAQ:VOLC), which they have built up to 9.81%. During the third quarter of 2014 they also opened new positions in Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) and GlaxoSmithKline plc (ADR) (NYSE:GSK).
Eagle Pharmaceuticals Inc (NASDAQ:EGRX) has been a relatively stable stock since its IPO in February, save for a couple of valleys in May and August. The stock enjoyed a very strong end to 2014 however, and has carried that momentum into 2015, up another 20.61% year-to-date. Eagle Pharmaceuticals Inc (NASDAQ:EGRX) has a number of promising drugs at various stages of their pipeline lifecycle, including Ryanodex, anticipated to be the first drug on the market to treat exertional heatstroke, and Pemetrexed, a ready-to-dilute liquid solution for mesothelioma sufferers that is safer to administer and less prone to dosage errors compared to the existing brand.
Sabby Capital is another investment firm with a focus on the healthcare industry, who like Camber, have also been invested in Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) and in fact scored big on them last summer with a large cache of lucrative call options. Their remaining call options in Vertex still represent their third most valuable holding.
On the other hand, despite their major position in Gevo, Inc. (NASDAQ:GEVO) now, it is not nearly as lucrative. That’s because the biofuel and renewable chemicals company’s stock is trading at just $0.13 in afternoon trading today. It suffered a nearly 50% drop on January 29 when Gevo announced a new public offering of 33.25 million shares. That makes Sabby’s large holding worth a mere $1.56 million.
There is however, potential for rapid growth in value, which is certainly what Sabby is banking on. Gevo, Inc. (NASDAQ:GEVO) intends to use the net proceeds from their most recent offering of shares to fund working capital and for corporate purposes. The company was recently forced to cut 41% of its staff at its headquarters in Douglas County, Colorado. However it received good news a few days later when it scored a Supreme Court patent battle victory over Butamax Advanced Biofuels LLC.
The last stock for consideration has been on a downward trajectory like Gevo, hitting several new 52-week lows throughout the past couple months. However, just as a run of 52-week highs likely signals a stock is about to peak (or already has) in the short term, the same thinking generally applies to stocks on long slides. This makes them attractive investment targets, and a chance for investors to get in on companies which may still be attractive long-term, but for whatever reason have suffered or appear ready to suffer in the short term.
Such is the case for Moab Capital Partners, whose large investment in Quality Distribution, Inc. (NASDAQ:QLTY) indicates they believe the worst is over for the stock. Other investors seem to agree, as short interest on it has steadily declined over the past few months. Indeed, the turnaround may already be in its beginning stages, as the stock is up 10% already this week. Analysts at Stifel Nicolaus recently updated their rating on Quality Distribution, Inc. (NASDAQ:QLTY), which operates a North American chemical bulk tank truck network, to ‘Buy’, with a $15.00 price target. That price target represents a more than 50% premium over current trading levels.
No matter which stock you like, you can’t go wrong with monitoring and tracking the activity of a select few hedge funds. It’s the best way to have access to the vast pools of resources and analytical tools that the top funds use to generate their impressive returns, which is why we follow and report on all of their moves.