Volatility is low and the markets are quiet today, although three major indexes are trading in the red.
In this article, we will analyze five stocks that are showing considerable more movement than the broader market and are attracting more interest, Bassett Furniture Industries Inc. (NASDAQ:BSET), Catabasis Pharmaceuticals Inc (NASDAQ:CATB), Alcobra Ltd (NASDAQ:ADHD), Sonus Networks, Inc. (NASDAQ:SONS), and McDonald’s Corporation (NYSE:MCD). We also find out how the smart money tracked by us are positioned towards each stock.
At Insider Monkey, we track around 740 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).
Bassett Furniture Industries Inc. (NASDAQ:BSET) is in the spotlight after the company reported its fiscal third quarter results. During the three-month period, Bassett earned $0.38 per share on revenue of $104.71 million, missing the consensus estimates by $0.01 per share and $7.68 million, respectively. Sales retreated by 5.7% year-over-year as the company’s comparable-store sales inched lower by 0.9%. Bassett Furniture’s management also said it plans to open five to six new locations and re-position four others next year. Chuck Royce‘s Royce & Associates raised its position in Bassett Furniture Industries Inc. (NASDAQ:BSET) by 48% in the second quarter to 730,000 shares held at the end of June.
Catabasis Pharmaceuticals Inc (NASDAQ:CATB)’s shares have surged by almost 50% after the company announced a joint research collaboration to explore a combination drug treatment approach for Duchenne muscular dystrophy with Sarepta Therapeutics Inc (NASDAQ:SRPT). Specifically, Sarepta will bring its expertise in terms of an exon skipping treatment, and Catabasis will contribute its oral NF-kB inhibition treatment knowledge. As with all nano-caps, investors should do due-diligence on both sides of the trade. According to our database of around 749 funds, three of them held around 10.80% of Catabasis Pharmaceuticals Inc (NASDAQ:CATB)’s float at the end of the second quarter.
On the next page, we take a closer look at Alcobra Ltd, Sonus Networks, and McDonald’s Corporation.
Alcobra Ltd (NASDAQ:ADHD) is 54% in the red after the FDA gave it a verbal notice that the company’s Investigational New Drug applications for MDX in ADHD and Fragile X Syndrome has been placed on full clinical hold due to adverse neurological findings in a pre-clinical study. MDX is the company’s lead product candidate. According to our records, the smart money was pretty overweight on Alcobra Ltd (NASDAQ:ADHD). On June 30, 15 funds tracked by Insider Monkey owned $64.61 million worth of Alcobra Ltd (NASDAQ:ADHD)’s stock, which accounted for over half the float.
Sonus Networks, Inc. (NASDAQ:SONS) shares are down by 9% after Cowen analyst Paul Silverstein downgraded the stock to ‘Underperform’ from ‘Market Perform’ and cut his target price to $4 per share from the previous $8. Silverstein cited industry checks that showed employee and management churn as well as operations challenges. The number of funds from our database with holdings in Sonus Networks, Inc. (NASDAQ:SONS) fell by eight quarter-over-quarter to 12 at the end of June.
Last but not least, McDonald’s Corporation (NYSE:MCD) is in the green after the restaurant chain raised its quarterly dividend by 5.6% to $0.94 per share from the previous $0.89 per share. At current prices, that translates to a yield of around 3.24%, or almost twice that of the 10-year bond. A total of 63 funds tracked by us were long McDonald’s Corporation (NYSE:MCD) at the end of the second quarter, down by 20 funds from the previous quarter.