Although St. Louis Federal Reserve President James Bullard recently said that holding interest rates too low for too long might aggravate inflation in the future, traders have largely brushed off the bearish comments and the three major indexes are mostly flat on the day. Among the stocks well in the green are Xura Inc (NASDAQ:MESG), MGT Capital Investments Inc. (NYSEMKT:MGT), Nanosphere, Inc. (NASDAQ:NSPH), Cellectar Biosciences Inc (NASDAQ:CLRB), and Relypsa Inc (NASDAQ:RLYP). Let’s find out why traders are piling into the five stocks and use data from the latest 13F filings to see how the world’s greatest investors are positioned towards these stocks.
Hedge fund sentiment is an important metric for assessing the long-term profitability. At Insider Monkey, we track over 760 hedge funds, whose quarterly 13F filings we analyze and 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 the details here).
Xura Surges On Buyout
Xura Inc (NASDAQ:MESG) is 16% higher today after the company agreed to be acquired by the affiliates of Siris Capital Group for $25 per share in cash. The acquisition agreement has been unanimously approved by Xura’s Board of Directors and is expected to close in the third quarter of 2016. As with many other deals, Xura has a 45 day ‘go-shop’ period in which it can solicit alternative acquisition proposals from third parties. Of the around 766 elite funds Insider Monkey tracks, 17 owned shares of Xura Inc (NASDAQ:MESG) at the end of March.
Day Trader Favorite Stock Rallies Higher
Although its volatility may be noticeably lower than in previous sessions, MGT Capital Investments Inc. (NYSEMKT:MGT)’s shares are nevertheless trading 4.8% higher as day traders continue to bet on the stock’s upward momentum. Shares of MGT Capital Investments Inc. (NYSEMKT:MGT) started surging after it was announced that eccentric software security pioneer John McAfee will be the company’s new CEO a few weeks ago. As part of the leadership change, MGT Capital will change its name to John McAfee Global Technologies and will pivot to focus more on the security market. MGT Capital is a classic case of a low float stock that surges on increased media attention. Whether McAfee can work his wonders again at MGT is anyone’s guess, however. In other news, MGT also reported a first quarter loss of $0.07 per share. Cash used in operations was $376,000, down 49% sequentially from the December 2015 quarter, and down 41% year-over-year. As with all nano-caps, investors should do their due-diligence before buying.
On the next page, we examine Nanosphere, Cellectar Biosciences, and Relypsa.
Acquisition Amendment Sends Nanosphere Soaring
Nanosphere, Inc. (NASDAQ:NSPH) has surged by 27% after Luminex Corporation (NASDAQ:LMNX) amended its acquisition agreement to acquire Nanosphere. Under the terms of the new deal, the new acquisition price will be $1.70 in cash per share, up from the previous $1.35 per share. The increase was due to an unsolicited third party offer for Nanosphere for $1.50 per share. According to our records, four funds owned $619,000 worth of Nanosphere, Inc. (NASDAQ:NSPH) shares, which accounted for 6.20% of the float on March 31.
Technical Buying Detected At Cellectar Biosciences Inc
Nano-cap Cellectar Biosciences Inc (NASDAQ:CLRB) is the beneficiary of some technical buying today, as its stock is 32% higher in the morning frame despite there being no fundamental news concerning the company. The only meaningful news last week was Cellectar Biosciences issuing a press release announcing that the company was making progress on its U.S. patent for Phospholipid-Ether Analogs as Cancer Targeting Drug Vehicles. Two funds out of the 766 funds that Insider Monkey tracks owned $507,000 worth of Cellectar Biosciences’ stock at the end of the first quarter. As with all nano-caps, investors should do their due-diligence before buying.
Relypsa Rallies on Data, Upgrade
Relypsa Inc (NASDAQ:RLYP) is 12% in the green today after the analysts at Morgan Stanley upgraded the stock to ‘Equal Weight’ from ‘Underweight’. Also fueling today’s rally is newly released data that showed Relypsa Inc (NASDAQ:RLYP)’s main drug, Veltassa, may, ‘bind and remove sodium as well as potassium in the gastrointestinal tract’. The data might increase market adoption for Veltassa. A total of 14 funds from our database owned around 1/3 of Relypsa Inc (NASDAQ:RLYP) at the end of March.