Although the pivotal U.S. election is now just five days away, the markets are rather calm as all three major indexes are close to flat.
In this article, let’s take a closer look at Lattice Semiconductor (NASDAQ:LSCC), Depomed Inc (NASDAQ:DEPO), Finish Line Inc (NASDAQ:FINL), Viacom, Inc. (NASDAQ:VIAB), and Dynegy Inc. (NYSE:DYN) and see why these stocks are on investors’ radars today. In addition, we will discuss the hedge fund sentiment towards each company in question, based on data from the last round of 13F filings.
At Insider Monkey, we track around 750 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 the details here).
Lattice Semiconductor (NASDAQ:LSCC) shares have spiked by 19% after the company agreed to sell itself to Canyon Bridge Capital Partners for $8.30 per share in cash, the total value of the deal amounting to $1.3 billion including Lattice’s net debt. The purchase has been unanimously approved by the boards of both companies, and the deal is expected to be closed in early 2017. Among the funds in our database, five funds owned $17.6 million worth of Lattice Semiconductor (NASDAQ:LSCC)’s stock, which accounted for 2.80% of the float on June 30, versus 10 funds and $28.28 million, respectively, on March 31.
Depomed Inc (NASDAQ:DEPO) briefly surged on open due to a Bloomberg report that stated that both Daiichi and Mallinckrodt are said to be considering making bids for Depomed. Shares of Depomed have retraced to close to flat, however, as sentiment around the stock remains cautious. Depomed shares have rallied by 24% year-to-date so far in part due to anticipation that management might unlock value through various strategic alternatives. A total of 23 funds tracked by us owned shares of Depomed Inc (NASDAQ:DEPO) at the end of June, unchanged from that of the previous quarter.
Traders are watching Finish Line Inc (NASDAQ:FINL) after Susquehanna analyst Sam Poser upgraded the stock to ‘Positive’ from ‘Neutral’ and reiterated his $23 price target. Poser thinks management’s move to potentially sell JackRabbit is a positive as it will improve focus on Finish Line’s core operations. Despite the upgrade, shares of the stock are in the red today as some investors remain on the sidelines until a more positive catalyst appears. The number of funds from our database with holdings in Finish Line Inc (NASDAQ:FINL) rose by five quarter-over-quarter to 21 at the end of June.
On the next page, we examine Viacom, and Dynegy.
Viacom, Inc. (NASDAQ:VIAB) shares are 2.5% in the green after Reuters reported that the media conglomerate is said to be in discussions to purchase Telefonica’s Telefe unit for approximately $385 million. Telefe is a major broadcaster in Argentina and a deal could be announced as early as this week. Viacom is in the green because some investors presumably believe the purchase will help deliver long term value for shareholders. According to our records, 41 funds had a bullish position in Viacom, Inc. (NASDAQ:VIAB) at the end of the second quarter.
Last but not least, Dynegy Inc. (NYSE:DYN) shares have surged by over 7% after Morgan Stanley analyst Devin McDermott reiterated his ‘Overweight’ rating and set a price target of $19 per share on the stock. Although shares of the electric utility fell nu 32% yesterday on the back of a disappointing earnings report that prompted some concerns over leverage and near-term cash flow, McDermott views Dynegy’s valuation as compelling given many of the negatives in the earnings report were one-time items that won’t affect the long-term fundamentals. In addition, McDermott thinks that the Dynegy’s growing free cash flow for 2018 and 2019 could help reduce the debt/adjusted EBITDA ratio and that there could still be a buyout or a M&A deal. A total of 43 funds tracked by Insider Monkey held around $1 billion worth of Dynegy Inc. (NYSE:DYN)’s stock, which accounted for 49.60% of the float on June 30, versus 41 funds and $689.74 million, respectively, on March 31.