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This is What’s Driving The Gains in Cisco, Morgan Stanley, Sprint, and More Today

The markets continue to recuperate on Friday, as all major U.S stock indexes are trading in the green. Among the stocks driving these surges, we can count Cisco Systems, Inc. (NASDAQ:CSCO), Morgan Stanley (NYSE:MS), 8×8, Inc. (NASDAQ:EGHT), Golar LNG Limited (USA) (NASDAQ:GLNG), and Sprint Corp (NYSE:S), all of which have posted nice gains today. Let’s take a look into why these stocks are on the rise, and into what the funds in our database think about these companies.

Imitating hedge funds and other institutional investors can help identify some of the most profitable stocks on the market. However, our extensive research that covered the period between 1999 and 2012, showed that the best approach is to follow these investors into their small-cap stocks. Our backtests showed that the 15 most popular small-cap stocks among hedge funds managed to generate a monthly alpha of 81 basis points, versus an alpha of 0.7 percentage points posted by their top 50 large-cap picks (see more details here).

Back to Friday’s movers, let’s take a look at Cisco Systems, Inc. (NASDAQ:CSCO), which is trading up by almost 1% this afternoon after CEO Chuck Robbins appeared on Bloomberg Surveillance. Robbins discussed several issues, including the changes in the tech segment, his outlook for the company this year and the potential for M&A in this market.

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Analyzing hedge fund sentiment towards Cisco Systems, Inc. (NASDAQ:CSCO), one of the first things that catches one’s attention is the decrease in institutional support that the company experienced over the latest reported quarter (the third quarter of 2015). Over the period, the number of hedge funds in our database long the stock fell by almost 7%, to 67. However, over the fourth quarter of 2015, one of the largest institutional investors of record, Ken Fisher’s Fisher Asset Management, added 134,268 shares to its holding, lifting the position to over 15.48 million shares, worth more than $420 million.

Next up is Morgan Stanley (NYSE:MS), which has gained more than 3.5% in Friday trading, a day after posting a solid bottom-line beat for the fourth quarter. Also today, the company’s China CEO Wei Christianson appeared on Fox Business to discuss the state of the Asian country’s market and economy.

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Opposite to Cisco, Morgan Stanley (NYSE:MS) saw hedge fund support increase by almost 19% over the third quarter. As of September 30, 57 funds among those we track held long stakes in the company. The largest position was that of Boykin Curry’s Eagle Capital Management, which disclosed ownership of more than 16 million shares, worth over half a billion dollars.

On the next page, we will take a look at the events driving the surges at 8×8, Inc. (NASDAQ:EGHT), Golar LNG Limited (USA) (NASDAQ:GLNG), and Sprint Corp (NYSE:S).

Sprint Corp (NYSE:S) is also up on Friday, having gained 12.8% after management announced that it would be moving up the date of its next earnings call, calming investors’ concerns around the company’s turnaround.

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Those concerns were seen during the third quarter, when the number of hedge funds in our database long the stock fell by roughly 30%, to 16. One of the most bearish firms during that time was William B. Gray’s Orbis Investment Management, which stood as the largest investor of the stock in our system as of the end of the second quarter, but which trimmed its exposure to the carrier by 89% to 7.76 million shares in the third quarter.

8×8, Inc. (NASDAQ:EGHT) announced its third quarter of fiscal year 2016 financial results after the market closed on Thursday. Earnings of $0.05 per share came in 66.6% above consensus estimates. Revenue of $53.17 million also beat estimates by roughly $1 million. Based on the results, shares of the small cap SaaS company have risen by more than 9% on Friday.

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Over the third quarter, the number of hedge funds in our database with long stakes in 8×8, Inc. (NASDAQ:EGHT) increased by 1 to 12. The largest new stake was the one initiated by Brian Ashford-Russell and Tim Woolley’s Polar Capital, which comprised 548,608 shares, worth about $4.5 million.

Finally, there’s Golar LNG Limited (USA) (NASDAQ:GLNG), up by almost 45% on Friday afternoon. It seems like the surge was triggered by a memorandum that the company signed with Schlumberger Limited. (NYSE:SLB). As per the memorandum, both companies will jointly develop greenfield, brownfield and stranded gas reserves globally. The aim of this venture is to reduce the time the companies take to bring proven gas reserves into production.

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Golar LNG Limited (USA) (NASDAQ:GLNG) saw hedge fund interest decline by 11% over the latest reported quarter. As of September 30, 39 funds in our database were long the stock. Having said this, it should be noted that in the fourth quarter, Christian Leone’s Luxor Capital Group more than quadrupled its position to 5.04 million shares, or about 5.4% of the company’s total shares.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned in this article.