Here’s Why These 5 Stocks Are Grabbing Headlines Today

Although the CBOE Volatility Index is at 14 and crude prices are near their 2016 highs, volatility is of course alive and well among individual stocks. Let’s take a look at some of today’s biggest movers, which includes Foresight Energy LP (NYSE:FELP), Clovis Oncology Inc (NASDAQ:CLVS), Peabody Energy Corporation (NYSE:BTU), Tetraphase Pharmaceuticals Inc (NASDAQ:TTPH), and Companhia Siderurgica Nacional (ADR) (NYSE:SID), and examine the reasons investors are buying or selling these stocks today (or are unable to trade them at all). We’ll also examine how the smart money in our database is positioned in the five equities.

Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see the details here).

Debt Holders Give Foresight Energy More Runway

Foresight Energy LP (NYSE:FELP) has surged by 47% after the company extended the term of an existing forbearance agreement with certain holders of the company’s 7.875% Senior Notes due 2021. As a result, the company’s forbearance period will run through April 15, 2016 and will hopefully provide Foresight Energy LP (NYSE:FELP) with more runway to find a white knight that could save it from declaring bankruptcy. The coal miner has been rumored to be close to a deal where the company’s billionaire founder might inject cash to save the company.

FDA Advisory Committee Gives Clovis’ Rociletinib the Thumbs Down; Investors Continue to Sell the Day After

Clovis Oncology Inc (NASDAQ:CLVS) shares are 7.8% in the red due to follow-on selling a day after the FDA’s Oncologic Drugs Advisory Committee voted 12-to-1 against accelerated approval for Clovis’ rociletinib, which is an investigational therapy for EGFR-positive non-small lung cancer. The committee recommended that the FDA wait to see the results from TIGER-3, Clovis’ ongoing Phase 3 trial of rociletinib, before making a final decision on approval. Patient enrollment for TIGER-3 isn’t expected to be complete until late 2018. If the FDA adopts the committee’s advice, the EGFR-positive non-small lung-cancer indication for rociletinib won’t be possible until 2019 or later. 24 funds in our database held 51% of Clovis Oncology Inc (NASDAQ:CLVS)’s float at the end of 2015. 19.5% of the company’s float is short.

On the next page we examine why Peabody Energy Corporation, Tetraphase Pharmaceuticals, and Companhia Siderurgica Nacional are making headlines today.

Peabody Files for Bankruptcy

Peabody Energy Corporation (NYSE:BTU) shares have been suspended after the coal miner filed for bankruptcy today. Peabody had $10.1 billion in debt and struggled to generate enough cash flow to support itself given the weak coal climate. Prices of metallurgical coal have fallen by almost two-thirds since 2011 and thermal coal prices have declined sharply due to cheap natural gas. Although the company said in a filing that it has $11 billion in assets, it is unclear if there is any value left in Peabody Energy Corporation (NYSE:BTU)’s equity.

Tetraphase Rallies on Better Sentiment

Tetraphase Pharmaceuticals Inc (NASDAQ:TTPH) is 12% higher as investors become more optimistic on the company’s prospects. The biotech company presented at the 26th European Congress of Clinical Microbiology and Infectious Diseases in Amsterdam held from April 9 through April 11 and the broader iShares NASDAQ Biotechnology Index (ETF) is 1.3% higher in afternoon trading. 13 funds in our system reported stakes in Tetraphase worth $39.9 million (representing 10.90% of the float) as of the end of December, compared to 15 funds holding $26.6 million in shares at the end of September. As with all micro-caps, investors should do their due diligence before making an investment decision.

Technical Buying in Brazilian Steel Maker Continues

Shares of beaten-up steel-maker Companhia Siderurgica Nacional (ADR) (NYSE:SID) continued their recent tear, surging by 18.5% today as momentum buyers pile into the stock due to technical reasons and as Brazil’s IBOVESPA index has soared to a 10-month high due to rising crude prices and the increasing belief that a new government will replace President Dilma Rousseff’s current one. Brazil is in a terrible recession and many investors feel the country needs new leadership to improve its economy. Companhia Siderurgica Nacional (ADR) (NYSE:SID) was in the portfolios of four hedge funds that we track at the end of December. Those funds held slightly over $330,000 worth of its shares.

Disclosure: None