Wall Street is in bull mode again, as all three indexes have opened well in the green and crude futures are up by more than 1.4%. In this article, we’ll take a look at why five equities: Cabelas Inc (NYSE:CAB), Cypress Semiconductor Corporation (NASDAQ:CY), J M Smucker Co (NYSE:SJM), General Electric Company (NYSE:GE), and Progressive Corp (NYSE:PGR), are garnering a lot of interest this morning and use SEC filings to see what hedge funds think of each stock.
Our research has shown that the best strategy is to follow hedge funds into their small-cap picks. This approach can allow monthly returns of nearly 95 basis points above the market, as we determined through extensive backtests covering the period between 1999 and 2012 (see the details here).
Cabela’s Shares Rise 3.8% on NY Post Story
According to the New York Post, Cabelas Inc (NYSE:CAB) is close to selling itself to Bass Pro Shops and Goldman Sachs. The auction of Cabela’s is expected to close in days, and previous potential bidders such as private equity firms TPG Capital and Apax Partners have dropped out. Although Cabela’s has declined to sell itself to Bass Pro in the past, it may have no choice given market expectations and activist pressure. If the two combine, Cabela’s and Bass Pro Shops would form the largest seller of outdoor hunting gear in the United States. According to our database of 766 active funds, the number of smart money funds with holdings in Cabelas Inc (NYSE:CAB) rose by one quarter-over-quarter to 23 as of the end of March.
Cypress Considering Strategic Alternatives
Cypress Semiconductor Corporation (NASDAQ:CY) shares have soared by 5% after Betaville reported that the company turned down a $14 per share offer from Chinese private equity firm Summitview Capital around three weeks ago. Apparently, Cypress management wanted a higher price and the company has hired Goldman Sachs to aid it as it considers its strategic options. As many as three private equity firms could be interested in bidding for the company. 13 funds that we track owned shares of Cypress Semiconductor Corporation (NASDAQ:CY) at the end of March.
On the next page, we’ll dig into the details of why J M Smucker, General Electric, and Progressive Corp are trending this morning.