After closing up on Friday, markets are witnessing small moves on Monday. But, while stock indexes are barely fluctuating, a few stocks have registered substantial gains. Among them, we could highlight The Fresh Market Inc (NASDAQ:TFM), Starwood Hotels & Resorts Worldwide Inc (NYSE:HOT), GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH), 3D Systems Corporation (NYSE:DDD) and Chemours Co (NYSE:CC). So, let’s take a look into the events driving their growth, and what the funds in our database think about these companies.
While there are many metrics that investors can assess in the investment process, hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor beat the S&P 500 by around 95 basis points per month (see more details here).
Back to the stocks that interest us, let’s start with The Fresh Market Inc (NASDAQ:TFM), whose stock is trading up more than 23% on Monday, after the company accepted an acquisition offer from an affiliate of Apollo Global Management LLC (NYSE:APO) for $28.50 per share, or roughly $1.36 billion. The price implies a 24% premium to the stock’s closing price on Friday, and more than a 50% premium to early-February prices – from before the market started pricing in a potential acquisition of The Fresh Market. The companies expect to close the deal in the second quarter of 2016, under the condition that more than 50% of the retailer’s common shares are tendered. Shares of Apollo Global Management are trading only slightly higher on Monday.
Among the funds that we track, one that stands to benefit from the sale of The Fresh Market Inc (NASDAQ:TFM) is Chuck Royce’s Royce & Associates. Over the fourth quarter of 2015, the fund started a position in the company, comprising 796,495 shares, valued at $18.65 million. At $28.50 per share, the stake is worth more than $22.7 million; Shares of The Fresh Market have gained about 21.5% year-to-date.
Next up is Starwood Hotels & Resorts Worldwide Inc (NYSE:HOT), up more than 7.8% on M&A activity, as well. Marriott International Inc (NASDAQ:MAR) had offered about $12.2 billion to acquire the company back in November, and the deal seemed on track. However, a new –unsolicited- bid emerged on Monday from a group led by Chinese Anbang Insurance, which offered $12.8 billion ($76 per share) for the company that owns the Sheraton chain, seeking to increase its presence in the American hotel industry. Shares of Starwood are already trading very close to $76, even though the company’s management said the Board was still recommending to support the merger with Marriot – but had allowed discussions with the new bidders until March 17.
Shares of Starwood Hotels & Resorts Worldwide Inc (NYSE:HOT) are now up more than 9.5 percent year-to-date, having widely outperformed all major U.S. stock indexes. More than 6% of the funds that we track must be happy with the performance; as of the end of the fourth quarter, 52 firms in our database were long the stock, and held more than 27% of the company’s total shares outstanding. Among them, we could highlight John Paulson’s Paulson & Co, which last disclosed ownership of 11.6 million shares of the company – by February 16. This stake makes it the largest investor of record to date.