With WTI futures now at $42.61 per barrel due to the weaker dollar and the labor strike in Kuwait, the S&P 500 and Dow Jones are each comfortably higher today. Among the stocks on the move in today’s relatively low-volatility climate are Denbury Resources Inc. (NYSE:DNR), ArcelorMittal SA (ADR) (NYSE:MT), Calumet Specialty Products Partners, L.P (NASDAQ:CLMT), GigPeak Inc (NYSEMKT:GIG), and Chemours Co (NYSE:CC). Lets examine why each stock is moving and see how the smart money tracked by Insider Monkey is positioned in each of them.
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Denbury Higher Due to the Rising WTI
Denbury Resources Inc. (NYSE:DNR) shares have surged by 10% out of the gate on the back of stronger WTI prices. Although last weekend’s meeting in Doha ended in abject failure after Saudi Arabia and Iran failed to see eye-to-eye on a freeze, the strike in Kuwait has solved the over-supply problem all by itself, sending supply down by around 1.7 million barrels per day. How long the strike lasts is up for debate, however. For the bulls, the longer the better. In other news, Denbury Resources announced that its borrowing base was cut to $1.05 billion from the previous $1.50 billion. 17 top funds in our database owned shares of Denbury Resources Inc. (NYSE:DNR) at the end of December.
ArcelorMittal Up 3% on Better Sentiment
ArcelorMittal SA (ADR) (NYSE:MT) is 3% in the green today on the strength of the lower dollar. The lower dollar means more emerging market growth, which means more steel demand. ArcelorMittal’s bondholders also tendered less than half of the bonds (of 1.5 billion euros) that the company wanted to buy back according to a statement released on Tuesday. Whether that’s a smart move depends on how long the oversupply situation in the industry lasts. Like the oil producers in Doha last weekend, China and major steel producers failed to reach a deal on Monday to solve global steel overcapacity. 16 top funds that we track in our database owned 2.8% of ArcelorMittal SA (ADR) (NYSE:MT)’s float at the end of December.
On the next page, we examine why Calumet Specialty Products Partners LP, GigPeak Inc, and Chemours Co. all have the interest of investors today.
Calumet’s Slide Continues
Calumet Specialty Products Partners, L.P (NASDAQ:CLMT) is down by another 12% today after analysts at DA Davidson cut their rating on the stock to ‘Underperform’ from ‘Buy’ and set a $5 price target on it. Calumet fell by almost 50% yesterday after the company suspended its quarterly cash distribution, citing the need to manage its capital structure with prudence in challenging times. Calumet also executed a $400 million private senior secured note placement and guided for a worse-than-expected first quarter loss of $59 million-to-$83 million, compared to expectations of a loss of just $19 million. Calumet Specialty Products Partners, L.P (NASDAQ:CLMT) was in just five hedge funds’ portfolios in our database at the end of December.
GigPeak Retreats 6% Despite Earnings Beat
GigPeak Inc (NYSEMKT:GIG) reported first quarter earnings of $0.05 per share on revenue of $11.4 million for its GigOptix, Inc segment, beating estimates by $0.01 per share and $0.28 million, respectively. The earnings beat was apparently not enough for investors, however, as shares of the company are down by 6% in afternoon trading. GigPeak CEO Avi Katz offering the following concerning the ongoing second quarter:
“As we enter Q2 FY16, the initial revenue outlook, which will include only about 10 weeks of sales from Magnum Semiconductor products in the total GigPeak revenue outlook, and is subject to potential revenue adjustments pertaining to purchase accounting rules related to the recently closed acquisition of Magnum Semiconductor, is expected to be in the range of approximately $15.0 million to $15.3 million, representing an increase of about 33 percent from Q1 FY16, and about 55 percent from Q2 FY15.”
Nine top funds that we track owned 12.5% of GigPeak Inc (NYSEMKT:GIG)’s shares at the end of 2015. As with all micro-cap stocks, investors should do their due-diligence before buying.
Technical Buying Detected at Chemours
Chemours Co (NYSE:CC) is 4.6% higher today on the back of strong technical momentum. Since bottoming out in early February, Chemours Co (NYSE:CC) shares have more than doubled and are now above several key moving averages. Helping boost sentiment is a price target boost by Citigroup yesterday. Analysts at the investment bank now have a price target of $8 on the stock, up from $5 per share previously. 22 funds that we track in our database held shares of the company at the end of December. That was down by two funds from the end of September.