With the NASDAQ index in the red and the S&P 500 and Dow Jones Indexes barely in the green, shares of Highpower International Inc (NASDAQ:HPJ), Chesapeake Energy Corporation (NYSE:CHK), MannKind Corporation (NASDAQ:MNKD), HP Inc (NYSE:HPQ), and Caesarstone Sdot-Yam Ltd (NASDAQ:CSTE) are exhibiting the same kind of movement in various directions today. Let’s find out why investors are trading these stocks at high volumes today and analyze how the hedge funds in our system were positioned in each stock as of December 31.
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 the details here).
It’s been a pretty fantastic day for Highpower International Inc (NASDAQ:HPJ) shareholders after the company announced that it has begun shipments of its lithium polymer batteries to drone maker DJI. DJI currently dominates the global drone market and is growing rapidly. Highpower CEO George Pan had this to say about the company’s work for the Chinese company:
“We are pleased to have passed DJI’s requirements as a product manufacturer and supplier, which we feel is a strong verification of both our flexibility and capability to cover a wider spectrum of products at a global reach. We have worked with the leaders in innovative and developing technologies, including the expansion of drone technology for recreational use and commercial enterprises. Working with DJI is a significant milestone in Highpower’s lithium battery business development and represents a new and exciting segment. As a world-leading drone brand, DJI is famous for its cutting-edge technology and rigorous requirements for its products and suppliers. Considering Highpower’s comparative lithium battery advantages and DJI’s high-end technologies, we feel that this is a mutually beneficial relationship that could grow over time.”
Given that Highpower International Inc (NASDAQ:HPJ) is a nano-cap, investors should do their due-diligence before considering an investment. None of the funds tracked by Insider Monkey held shares of the company at the end of December.
Chesapeake Energy Corporation (NYSE:CHK) shares have surged by more than 28% out of the gate a day after the company announced that it has reached a debt agreement with its lenders that postpones the review of the company’s $4 billion revolving credit facility until June 2017. In return, Chesapeake Energy has pledged nearly all of the company’s assets as collateral. Analysts at Citi think the new debt agreement removes the possibility of Chapter 11 for Chesapeake in 2016 and gives the company time to benefit from potentially rising energy prices. A short squeeze and momentum buying could be reasons for today’s positive price action, an even stronger continuation of yesterday’s gains seen in the stock. Carl Icahn‘s Icahn Capital LP was among 32 funds in our database that held shares of Chesapeake Energy Corporation (NYSE:CHK) at the end of 2015.
On the next page, we examine what’s happening with shares of MannKind Corporation, HP Inc, and Caesarstone Sdot-Yam Ltd.