On the last Friday before earnings season officially begins, investors are generally in a good mood, as all three indexes are up and crude futures are over 5% in the green. Among the trending stocks today are Alliance Fiber Optic Products Inc (NASDAQ:AFOP), Corning Incorporated (NYSE:GLW), Anavex Life Sciences Corp.(NASDAQ:AVXL), SeaChange International (NASDAQ:SEAC), and CME Group Inc (NASDAQ:CME). Let’s find out why these stocks are trending and analyze how hedge funds have felt about them recently.
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It’s M&A Friday, as Corning Incorporated (NYSE:GLW) is acquiring Alliance Fiber Optic Products Inc (NASDAQ:AFOP) for $18.50 per share in cash. Corning shares are slightly in the green, while Alliance Fiber Optic shares are 19.44% higher on the news. Corning is acquiring Alliance to expand the company’s market access to cloud data-center operators and OEMs, and to broaden its presence in Asia. The transaction should deliver cost and product synergies that generate 3% incremental sales growth and be accretive to EPS in the first year. Both companies’ board of directors have approved the deal, and the acquisition is expected to close before the end of the second quarter.
38 elite funds in our database owned 6.5% of Corning Incorporated (NYSE:GLW)’s shares on December 31, while there were 7 funds with positions amounting to 5.2% of Alliance Fiber Optic Products Inc (NASDAQ:AFOP)’s shares at the end of 2015. John A. Levin‘s Levin Capital Strategies was the largest of the 38 shareholders of Corning, owning roughly 14.75 million shares at the end of December.
Anavex Life Sciences Corp. (NASDAQ:AVXL), a clinical-stage biopharmaceutical company developing differentiated therapeutics for the treatment of neurodegenerative diseases, is 12.22% higher today after the FDA tagged the company’s ANAVEX 3-71 with the Orphan Drug designation for the treatment of Frontotemporal dementia. Frontotemporal dementia afflicts approximately 50,000-to-60,000 patients in the U.S and represents 10%-to-20% of all dementia cases. Orphan Drug designation provides sponsors with commercial and development incentives, including seven years of market exclusivity in the United States, certain exemptions or reductions in regulatory fees, and prioritized consultation from the FDA on clinical studies. Two top funds in our system held $210,000 worth of shares of Anavex Life Sciences Corp.(NASDAQ:AVXL) as of December 31. As with all micro-caps, investors should do due-diligence before making any investment decision.
On the next page we delve into the latest news regarding SeaChange International and CME Group.
SeaChange International (NASDAQ:SEAC) shares are off by almost one-third this morning after the company reported disappointing fourth quarter of fiscal year 2016 results. For the period, the company’s revenue fell by 13.1% year-over-year to $27.19 million, missing estimates by $3.3 million. Non-GAAP profit came in flat versus expectations of $0.01 per share in positive net income. The company’s GAAP loss came in at $0.66 per share, primarily due to the impairment of Timeline Labs’ net assets, stock-based compensation, severance and restructuring costs, and other impairments. CEO Ed Terino said about the results:
“While we are disappointed in our fiscal 2016 financial performance, we did make significant operational improvements during the year. As we enter fiscal 2017, we intend to further increase operational efficiencies and deliver new software product innovations that capitalize on our core competencies in video delivery, content management and monetization. Specifically we will be focused on leveraging our R&D investments and becoming more efficient with our spending as we roll out our platforms for current customer commitments and introduce new cloud-based software products that provide opportunities in our core TV service provider segment, as well as adjacent markets. In addition, we are investing in our sales and marketing capabilities in response to these market opportunities. We believe that these actions will enable SeaChange to return to revenue growth and profitability on a full year basis in fiscal 2017.”
For the full 2017 fiscal year, SeaChange International (NASDAQ:SEAC) anticipates revenue of $110 million-to-$120 million and non-GAAP operating income of $0.05-to-$0.15 per diluted share. Ten hedge funds that we follow, headed by Jim Simons’ Renaissance Technologies, owned slightly over one-fifth of the company’s float as of the end of 2015.
CME Group Inc (NASDAQ:CME) shares are modestly lower today after BM&FBovespa announced that it had sold its 4% stake in the company. The sale of 13.6 million class A shares of CME Group raised at least $1.254 billion, which translates to a minimum of $92.00 per share. Due to his company selling its stake in CME Group, BM&FBovespa CEO Edemir Pinto resigned from CME Group’s board of directors. The number of world-class funds with positions in CME Group Inc (NASDAQ:CME) rose by 3 to 45 during the fourth quarter.