Equities have opened sharply lower today as investors remain cautious ahead of the Federal Reserve’s monetary policy meeting next week. In the last few days, the Fed has given mixed signals on whether it will hike the interest rates next week. Among the major losers today in early trading are Financials and Energy stocks. Financial stocks have struggled for most of the year as the low interest rate environment is having a negative impact on their net interest margins. Energy stocks, meanwhile, have come under pressure as oil prices have hit a one-month low.
Although the market has seen a sharp pullback in early trading, there are some stocks bucking the trend. Among the stocks trading higher on Friday, are Condor Hospitality Trust Inc. (NASDAQ:CDOR), Ascena Retail Group Inc (NASDAQ:ASNA), Aerie Pharmaceuticals Inc (NASDAQ:AERI), GenMark Diagnostics, Inc. (NASDAQ:GNMK), and Harsco Corporation (NYSE:HSC). We will also look at the hedge fund sentiment towards these stocks.
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).
Condor Hospitality Trust Inc. (NASDAQ:CDOR) shares are up by more than 30% in early trading today. The stock has been gaining momentum after the company announced that it is increasing its common stock dividend to an annualized $0.12 per share and declared a dividend of $0.03 per share for the third quarter. Condor Hospitality Trust shares are up by more than 90% so far this year.
Ascena Retail Group Inc (NASDAQ:ASNA) has had a disappointing year so far, with its stock falling by more than 18%. This morning though, the company’s shares are up sharply on significant volume. Earlier this week, Ascena announced that it will release its financial results for the fourth quarter of 2016 on Monday, September 19 and analysts currently expect Ascena to report earnings of $0.16 per share and revenue of $1.77 billion. Of the funds we track at Insider Monkey, 23 funds held $224.27 million worth of Ascena Retail shares at the end of the June quarter, compared to 29 funds holding $386.55 million worth of shares at the end of the previous quarter.
Aerie Pharmaceuticals Inc (NASDAQ:AERI)’s stock registered a rally on Thursday and the gains extended into Friday trading. Aerie Pharmaceuticals has been advancing after announcing that its Roclatan succeeded in a late-stage study (see details). The company has taken advantage of the jump in its stock price and initiated a secondary offering where it plans to sell around $75 million worth of stock at around $29.50 apiece. Several analysts raised their price target on the stock on Thursday following the successful trial results. Among them, Royal Bank of Canada raised its price target on the stock to $55, Cantor Fitzgerald and Stifel Nicolaus raised their price targets to $50, while Needham Company boosted its target to $52. All four brokerages have a ‘Buy’ rating on the stock. Aerie Pharmaceuticals had 17 funds in our database long its stock at the end of June, having amassed $153.39 million worth of shares, which translated to 32.80% of the total outstanding shares.
Read about two other major gainers in early trading today on the next page.