The US stock market is trading in negative territory following jobs data that showed that the US economy added 156,000 jobs in September, slightly lower than expected, while the unemployment rate inched up to 5%. Wall Street is now trying to assess how the data will impact the Fed’s decisions regarding the interest rates in the next couple of months.
Meanwhile, a number of stocks, including Lipocine Inc. (NASDAQ:LPCN), Zillow Group Inc. (NASDAQ:ZG), Etsy Inc. (NASDAQ:ETSY), Universal Insurance Holdings Inc. (NYSE:UVE), and Heritage Insurance Holdings Inc. (NYSE:HRTG), are trading higher today on the back of positive catalysts. Let’s take a closer look at these five stocks and assess the hedge fund sentiment towards them.
Hedge fund sentiment is an important metric for assessing long-term profitability. At Insider Monkey, we track over 740 hedge funds, whose quarterly 13F filings we analyze to determine their collective sentiment towards several thousand stocks. However, 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 more details here).
Lipocine Inc. (NASDAQ:LPCN) stock has surged by more than 26% after HC Waiwright initiated coverage on the stock with a ‘Buy’ rating and a price target of $25. Analyst Corey Davis thinks that Lipocine’s drug delivery technology Lip’ral makes the company stand out among its peers and that its oral testosterone product that is currently under development is more advanced in comparison with topical or injectible products provided by competitors. Among the funds we track, nine funds held $11.69 million worth of Lipocine’s stock in aggregate at the end of June, having amassed 20.80% of its outstanding stock, compared to 12 investors that held $41 million worth of stock a quarter earlier.
Zillow Group Inc. (NASDAQ:ZG) stock is trading higher after Needham & Company LLC initiated coverage on the stock. Needham analyst Kerry Rice set a a ‘Buy’ rating and $40 price target on the stock, citing expectations of an increased marketing spending from real estate agents on Zillow’s network of websites. The number of funds from our database long Zillow Group Inc. (NASDAQ:ZG) increased to 26 from 21 during the second quarter, while the total value of their holdings advanced to $714 million from $400 million.