Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

One Tech Stock Made Investors Happy Today & One Healthcare Company You Should Follow Hedge Funds Into

One of the stocks that stands out on Thursday is Envivio Inc (NASDAQ:ENVI). Even though it has a market cap of only $55 million, it surged by over 114% today on a huge trading volume of 10.40 million shares, compared to an average of just 82,300 shares. Far behind it, is healthcare company Sangamo Biosciences, Inc. (NASDAQ:SGMO), which jumped by over 26% today on a volume roughly five times above average. We will get into the developments behind these moves in a bit, meanwhile it’s important to mention that both companies have strong support from hedge funds, with Envivio Inc (NASDAQ:ENVI) also being in the middle of an activist campaign.

Biotech Biochemical Stocks 3

Whether or not hedge funds like a stock is an important metric to follow, because these large investors show a great level of skill and expertise when it comes to picking stocks. Over the last years equity hedge funds have trailed the market by a large margin, but that’s mostly due to their hedging and short positions, which perform poorly in a bull market. Their long positions performed far better, especially their small-cap picks, which have the potential to beat the market by 95 basis points per month on average, as our backtests showed. Our small-cap strategy involves imitating a portfolio of 15 most popular small-cap picks among hedge funds and it has returned 118% since August 2012, beating the S&P 500 ETF (SPY) by around 60 percentage points (read more details here).

Envivio Inc (NASDAQ:ENVI)‘s stock showed such impressive results on the back of the announcement that it had agreed to be acquired by telecom equipment company Ericsson for $125 million. The deal involves a cash tender offer, under the terms of which shareholders of Envivio will be entitled to receive $4.10 in cash. After the deal is completed, Envivio, which provides IP video processing and distribution solutions,  will be part of Ericson’s TV and Media Business.

Among the funds from our database, Envivio Inc (NASDAQ:ENVI) was included in the equity portfolios of five investors, which held in aggregate $10.69 million worth of stock, representing over 20% of the company. As stated earlier, Envivio was involved in an activist campaign launched by J. Carlo Cannell’s Cannell Capital. At the end of June, Cannell Capital issued a presentation in which it expressed concerns regarding the company and urged shareholders to vote against two incumbent directors at the Annual Meeting (see more details here). Cannell held 1.70 million shares of Envivio at the end of June, and taking into account that with today’s gains the stock is up by more than 40% year-to-date, the investor will be happy with the latest development. Moreover, the largest shareholder of Envivio Inc (NASDAQ:ENVI) in our database is Edward Gilhuly and Scott Stuart’s Sageview Capital, which owned 2.63 million shares at the end of June. Nevertheless, it’s important to point out that despite today’s move, the stock is still down by more than 70% since its IPO in April 2012.

The appreciation of Sangamo Biosciences, Inc. (NASDAQ:SGMO)‘s stock was fueled by news that its Phase 1 study protocol for a ZFP Therapeutic, as a potential therapy for the treatment for hemophilia B, was approved by the National Institutes of Health’s Recombinant DNA Advisory Committee (RAC). According to a statement issued by the company, the Factor IX program represents the first study of in vivo genome editing.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.