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Pharmaceutical And LNG Stocks Are Driving The Market Higher Today

U.S. stocks look set to end today’s trading session in green territory, having gone through a strong selloff last week. Among them there are several stocks that have registered massive gains today and in this article we’ll take a look at what drove Actinium Pharmaceuticals Inc (NYSEMKT:ATNM), Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR), American Midstream Partners LP (NYSE:AMID), Oneok Partners LP (NYSE:OKS) and Teekay LNG Partners L.P. (NYSE:TGP) higher today.

But why do we track hedge fund activity? From one point of view we can argue that hedge funds are consistently underperforming when it comes to net returns over the last three years, when compared to the S&P 500. But that doesn’t mean that we should completely neglect their activity. There are various reasons behind the low hedge fund returns. Our research indicated that hedge funds’ long positions actually beat the market. In our back-tests covering the 1999-2012 period hedge funds’ top small-cap stocks edged the S&P 500 index by double digits annually. The 15 most popular small-cap stock picks among hedge funds also bested passive index funds by around 53 percentage points over the 38 month period beginning from September 2012 (read the details here).

The frenzy around Actinium Pharmaceuticals Inc (NYSEMKT:ATNM) is still strong, with the stock advancing by as much as 24% during the first hours of trading. Last Thursday, the U.S. Food and Drug Administration gave the green light for the Phase III trial of Actinium candidate Iomab-B. The company developed the drug as a complement for the treatment of Acute Myeloid Leukemia in senior patients who are not eligible for hematopoietic stem cell transplant.

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Only 5 of the hedge funds we track held a position in Actinium Pharmaceuticals Inc (NYSEMKT:ATNM) at the end of the third quarter, up from 3 at the end of June. Israel Englander‘s Millennium Management holds the largest position in Actinium, having reported ownership of 165,025 shares valued at $292,000 in its latest 13F filing.

Shares of Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR) are surging today after analysts at Guggenheim upgraded the stock to ‘Buy’ from ‘Sell’ rating. The firm has also increased its price target to $13 per share from the previous target of $7. The stock took a battering this year, as the company’s leading drug Juxtapid faced increased competition and investors drove the stock price to single digits. Today, however, shares have rallied by more than 15%, currently trading around the $10.5 level.

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At the end of the third quarter, some 52% of Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR) common stock was held by 16 funds among those we track. Alex Denner is bullish on this stock, having boosted his stake by 26% during the quarter to amass 2.55 million shares worth in excess of $34.7 million.

Investors pushed American Midstream Partners LP (NYSE:AMID) shares up by as much as 51% today, after news emerged that ArcLight Capital Partners, LLC, which controls the general partners of American Midstream, has agreed to a unit purchase program that could rise up to $75 million.

“As the sponsor of the Partnership, we strongly believe the Partnership’s current unit price undervalues the assets of the Partnership. In light of this belief, […] ArcLight authorized an additional $75 million investment to be used for ArcLight to acquire common units of the Partnership” said Dan Revers, managing partner of ArcLight.

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American Midstream Partners LP (NYSE:AMID) is not a very popular stock among hedge funds, with only three funds holding a minor 1.6% of its common stock, according to the latest round of 13F filings. Michael Price made a big play in this stock, having boosted his position by more than 500% during the quarter. In its latest 13F filing, Price’s MFP Investors reported ownership of 350,000 shares valued at $3.88 million.

A fresh update on 2016 guidance sent Oneok Partners LP (NYSE:OKS) shares soaring by 15%. In a press release, the company’s managing partner ONEOK said it expects revenues to increase, driven by volume and fee-based margin growth. The company also said the dividend will not change in 2016 and that it expects free cash flow after dividend and cash on hand to add up to $250 million, available for the support of Oneok Partners.

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At the end of September, 8 of the hedge funds we follow reported a long position in Oneok Partners LP (NYSE:OKS), down from 9 a quarter earlier. Dmitry Balyasny used the opportunity to buy the stock on the dip, as Balyasny Asset Management reported a 10% increase in its holding to 109,132 shares valued at $3.19 million at the end of the quarter.

Having survived a massive hammering last Thursday when shares fell by more than 50%, Teekay LNG Partners L.P. (NYSE:TGP) has regained some ground today after shares surged by as much as 21%. The stock fell of a cliff after the company announced plans to reduce quarterly cash distributions to $0.14 per share from $0.70 per share. Teekay intends to use this money to service existing debt and to fund equity capital requirements in order to avoid the need to raise money from capital markets. So far this year, the stock has been falling like a rock, losing more than 70% of its value.

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Teekay LNG Partners L.P. (NYSE:TGP) is not far behind Oneok Partners, having attracted the attention of only seven hedge funds, which held less than 1% of its common stock. Israel Englander took advantage of the falling prices to load up on Teekay shares during the third quarter. In its latest 13F filing, Millennium Management reported a holding that amounted to 237,341 shares worth some $5.68 million.

Disclosure: none

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