It’s been a volatile day on Wall Street as the markets initially sold off sharply on fears of the consequences of a potential Brexit. The markets have since recovered some of those losses, as long-term investors buy in anticipation of robust future earnings growth. Among the stocks rising in today’s sea of red are Axiall Corp (NYSE:AXLL), Connecture Inc (NASDAQ:CNXR), Global Blood Therapeutics Inc (NASDAQ:GBT), NovaGold Resources Inc. (USA) (NYSEMKT:NG), and Barrick Gold Corporation (USA) (NYSE:ABX). Let’s find out how elite funds are positioned in each stock and see why traders are buying them today.
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).
Buyout At Axiall
Axiall Corp (NYSE:AXLL) shares are 25% in the green after Westlake Chemical Corporation (NYSE:WLK) entered into a definitive agreement to buy all of the outstanding shares of Axiall for $33 in cash per share, representing a total enterprise value of around $3.8 billion. The agreement has been approved by both companies’ board of directors and is expected to close by the end of 2016. Westlake management believes the combination will yield annual cost synergies of $100 million and be accretive in the first year after completion of the deal. The number of elite funds in our database holding shares of Axiall Corp (NYSE:AXLL) jumped to 36 from 17 quarter-over-quarter as of the most recent 13F reporting period.
Connecture Spikes on Filing
Connecture Inc (NASDAQ:CNXR) is 28% higher after the company filed a Form 8-K in which the company reported that it and its subsidiary have entered into an amended credit agreement with Wells Fargo Bank. Under the terms of the amended agreement, the loan maturity date is extended to June 8, 2021 from January 18, 2018 and term loan funding is increased to $35 million from $20 million, among other changes. On June 7, Connecture Inc (NASDAQ:CNXR) also completed the acquisition of ConnectedHealth LLC for $5 million. 7 savvy funds owned shares of Connecture at the end of the first quarter out of the 766 active funds that Insider Monkey tracks.
On the next page we examine why shares of Global Blood Therapeutics, NovaGold Resources, and Barrick Gold are gaining ground today.
Global Blood Rises on Study Results
Global Blood Therapeutics Inc (NASDAQ:GBT) shares have surged by 14% today after a Phase 1/2 trial showed that patients who took the company’s lead product candidate GBT440 experienced a sustained median reduction of 70% in irreversibly sickled cells within 90 days. That was far better than the increase of 15% for those patients given a placebo. The results of the study were presented at the European Hematology Association’s 21st Congress. GBT440 is a once-daily treatment candidate for sickle cell disease. The number of top funds with holdings in Global Blood Therapeutics Inc (NASDAQ:GBT) increased to 15 from 14 quarter-over-quarter as of March 31.
Fear Drives Gold Shares Higher
As is customary during panics or sudden bearish shifts in sentiment, gold spot prices are in the green today, up by around 0.35%. As gold spot prices go up, so have the shares of gold-related companies such as NovaGold Resources Inc. (USA) (NYSEMKT:NG) and Barrick Gold Corporation (USA) (NYSE:ABX). Shares of NovaGold Resources Inc. (USA) (NYSEMKT:NG) are up by 1.6% and shares of Barrick Gold Corporation (USA) (NYSE:ABX) have surged by more than 3% in morning trading. Traders are buying gold and gold-related securities as a hedge against a potential scenario where a Brexit causes a black swan event that sends equity prices lower. Gold has also been bought up since last week’s payroll report showed disappointing jobs growth, with some traders expecting the report to delay the Federal Reserve’s eventual rate hikes by a few quarters.
Finally, George Soros of Soros Fund Management has made waves with his recent bearish commentary and stance on China, the EU, and the global markets in general, to which he himself has responded to by buying gold, most notably a large position in Barrick Gold during the first quarter. If the main indexes run into trouble, gold could be even more in demand as a safe haven. Of the funds in Insider Monkey’s database, 22 owned $354.5 million of NovaGold Resources Inc. (USA) (NYSEMKT:NG) shares, while 49 funds owned $2.73 billion of Barrick Gold Corporation shares at the end of March.