Nvidia (NVDA) Can’t Shake Citron, Cempra (CEMP) Slammed by FDA Rejection, Plus 3 Other Major Movers

The second-to-last trading day of 2016 is showing little volatility in the broader market, with the S&P, Dow, and Nasdaq all being close to flat (the Nasdaq is faring the worst, as it’s shed 0.15% of its value). Among the data points that investors are mulling over today are the recent jobless claims report, as well as a report on U.S exports. The latter declined in November, pushing the U.S trade deficit higher, while the former showed a decline last week, with jobless claims falling to just 265,000.

Despite the flat market, several stocks are seeing big shifts in their value today. Among them are three big gainers in the form of Mobileye NV (NYSE:MBLY), Endologix, Inc. (NASDAQ:ELGX), and Cesca Therapeutics Inc (NASDAQ:KOOL), while Cempra Inc (NASDAQ:CEMP) and NVIDIA Corporation (NASDAQ:NVDA) aren’t faring nearly so well. Let’s see why these stocks are making waves on Thursday and what it might mean for them going forward.

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively the most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs.

We’ll start with Mobileye NV (NYSE:MBLY), which is 6.66% in the green today (I think investors will forgive it for the ominous gains, which will probably be vastly different by the time this article is published anyway; such is the life of a finance writer trying to make a quirky inference to a stock’s numerical movement; but I digress). Mobileye is enjoying the otherworldly gains after announcing a partnership with HERE, which will see the companies combine their autonomous vehicle software offerings, providing auto manufacturers with leading solutions to power partly or fully autonomous vehicles on their journey.

The news and spike comes a day after Piper Jaffray analyst Alexander Potter ranked Mobileye the auto stock with the greatest potential in 2017 (though also the riskiest), suggesting the stock could see gains of as much as 70%. It appears the stock wasn’t going to wait around until 2017 to make Potter look good, but also partly foil his 70% prediction, which now becomes slightly tougher to achieve. Oh, that devilish stock. Mobileye was owned by 30 of the hedge funds in our database at the end of September, a 25% increase from the end of June.

Endologix, Inc. (NASDAQ:ELGX) is doing even better today, posting 11.70% gains after it announced the removal of temporary holds which had been placed on some of its medical devices. The hold had been announced just two days prior, after the company uncovered issues related to the manufacture of some sizes of its AFX and AFX2 Endovascular AAA Systems. Production of the AFX System is now fully operational, while some sizes of the AFX2 system are good to go. Testing of some other AFX2 sizes is ongoing according to the company. Unfortunately for shareholders, the development this week has still amounted to a steep loss for them, despite the quick update which suggests that many of the issues have already been resolved. Shares are still down by 15.44% this week. Ownership of the stock among the hedge funds that we track fell by 33% during the third quarter, to 16 funds at the end of September. James Dondero‘s Highland Capital was one of the funds to sell off its stake in the company during the quarter, offloading its 184,600-share position.

We’ll check out three more stocks making big moves today on the next page.

Cesca Therapeutics Inc (NASDAQ:KOOL) is the day’s top gainer, rising by 32%, seemingly on a filing with the SEC. However, the filing only indicates that Boyalife (Hong Kong) Ltd purchased the shares and warrants owned by Boyalife Investment, Inc, which totaled 6.10 million shares and warrants to acquire up to 2.94 million shares. It’s unclear why the market is reacting so positively to the news. It appears it’s being reported as an insider purchase of some renown on several websites, but it actually appears to be nothing more than a company moving an investment between its offices. We would steer clear of this rally for now until more information emerges. Cesca Therapeutics shares were not owned by any of the investors in our database at the end of September.

Cempra Inc (NASDAQ:CEMP) has plummeted by 56% today on much more tangible news: the FDA rejected solithromycin, the company’s antibiotic for the treatment of community-acquired bacterial pneumonia (CABP). The FDA rejected the treatment on the grounds that its dataset, which covered 920 patients, was not large enough to determine the drug’s risk of causing liver injuries. While the data showed no cases of acute liver injuries, there was an alarming increase in liver enzymes. The FDA suggested a 9,000-patient trial would be necessary, though the drug’s label would still include a warning even if the trial were a success. Given that, Morgan Stanley analyst Andrew Berens believes Cempra will cease development of the drug. 13.9% of Cempra’s float was held by 15 of the hedge funds in our system on September 30.

Lastly is NVIDIA Corporation (NASDAQ:NVDA), which continues to feel the pain of being targeted by notorious short-selling firm Citron Research. In a tweet yesterday, the firm, which identified itself as previously being a fan of the stock, warned that headwinds will push Nvidia back down to $90 in 2017, or 23% lower than what it began yesterday at. Shares have slid by 9.17% in the past two days, including by 1.62% today. Nor was Citron the only source warning investors that Nvidia may have peaked; Investors.com noted that technical signals were lined up against the stock, suggesting a 27% decline (close to Citron’s own predicted drop) would be a normal correction to its 50-day moving line. 51 hedge funds tracked by Insider Monkey were long Nvidia at the end of the third quarter, owning 5.8% of its float.

Disclosure: None