Shares of Seadrill Ltd (NYSE:SDRL), Marathon Oil Corporation (NYSE:MRO), Viacom, Inc. (NASDAQ:VIAB), Parnell Pharmaceuticals Holdings Ltd (NASDAQ:PARN), and Intrexon Corp (NYSE:XON) are surging on the last day of the trading week, for various reasons. In this article, we will examine why traders are piling into each stock and also see how the world’s greatest investors are positioned in each company.
Our research determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor to beat the S&P 500 by around 95 basis points per month (see the details here).
Seadrill and Marathon Oil Rally on Higher Crude Prices
Seadrill Ltd (NYSE:SDRL) and Marathon Oil Corporation (NYSE:MRO) shares have rallied by over 4% and 3%, respectively today on the back of stronger crude prices. In morning trading, Brent prices have rallied by 2.49% to $45.64 per barrel while WTI futures have crossed the $44.00 per barrel mark as traders become more optimistic on the supply and demand outlook for the commodity. Demand for offshore drilling will increase the higher crude prices go (although the sector might need considerably higher prices in order for many firms to be competitive). Existing wells for E&Ps will generate more cash if WTI prices rise too. Of the 786 elite funds that we track, 21 funds owned $57.95 million worth of Seadrill Ltd (NYSE:SDRL)’s shares, which accounted for 3.50% of the float on December 31, down from 23 funds with $108.92 million in holdings respectively on September 30. Cliff Asness’ AQR Capital Management was among 27 top funds that held Marathon Oil Corporation (NYSE:MRO) in their portfolios at the end of 2015.
On the next page, we examine the trading action on Viacom Inc, Parnell Pharmaceuticals, and Intrexon Corp today.
Technical Traders Buy Viacom
Viacom, Inc. (NASDAQ:VIAB) shares are 1.74% in the green today as traders try to catch the momentum of yesterday’s big move. Viacom, Inc. (NASDAQ:VIAB) rallied more than 13% yesterday after the company announced that it had renewed a deal with DISH Network Corp (NASDAQ:DISH) to allow Comedy Central, MTV, BET, and Nickelodeon to remain available on DISH. Viacom CEO Philippe Dauman discussed the deal in a press release announcing the move:
“DISH has historically been and remains an important partner for Viacom, and as part of our commitment to entertain audiences wherever they are, we are pleased to offer select Viacom networks as part of DISH’s Sling TV product. Today’s renewal, together with several additional affiliate agreements announced over the past year, will enable Viacom to drive growth and deliver better, more engaging viewer experiences for years to come.”
Cliff Asness‘ AQR Capital Management trimmed its position in Viacom by 10% in the fourth quarter but still had a holding of over 2.6 million shares at the end of December.
Parnell Up on Earnings
Parnell Pharmaceuticals Holdings Ltd (NASDAQ:PARN) is up by 18% in late morning trading after the nano-cap reported its first quarter results. For the three months ended March 31, Parnell grew revenue by 43% year-over-year to $2.2 million. U.S. sales for the company’s production animal unit came in at $1.3 million. CEO Robert Joseph went over the strong results in a press release:
“Parnell had a fantastic first quarter in 2016 with strong revenue growth across our whole business. We were particularly pleased with our US Production business which performed above our expectations as did our Australian Companion Animal business. Our US Companion team continued to establish a strong footprint in the market with Fetch™ (our digital app) and Glyde™ (our nutraceutical for osteoarthritis, or OA). After several months of negotiations we have now agreed upon terms with a major multi-national pharmaceutical company on a contract manufacturing agreement that we expect to sign as early as next week.”
In our database of 786 active hedge funds, two funds owned roughly 4.7% of Parnell Pharmaceuticals Holdings Ltd (NASDAQ:PARN)’s float as of December 31. As with all nano-caps, investors are urged to do their due diligence before investing.
Intrexon Shares Stable After Yesterday’s Drop
Intrexon Corp (NYSE:XON) is 4% in the green today as traders are no longer as skittish about the company after yesterday’s big drop. As we mentioned yesterday, Intrexon Corp (NYSE:XON) fell after Spotlight Research (formerly Forensic Research Analyst) questioned whether the company’s 100% rally over the past three months, which was kickstarted due to the buzz around the company’s genetically modified mosquitoes product to combat the Zika virus, had gone too far. It should be noted that despite that previous rally and today’s gains, shares of the company are still down by 6% this year and by 37% over the past 52 weeks.