The major indexes appear to be in consolidation phase as they sit below their 52-week highs and volatility remains low.
Among the stocks showing more volatility than the main indexes right now are Cynapsus Therapeutics Inc (NASDAQ:CYNA), Twitter Inc (NYSE:TWTR), Greif, Inc. (NYSE:GEF), Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR), and Vale SA (ADR) (NYSE:VALE). In this article, we’ll check out why each stock is in the spotlight and use the latest regulatory filing data to see how hedge funds traded each stock in the second quarter.
Hedge fund sentiment is an important metric for assessing the long-term profitability. At Insider Monkey, we track over 750 hedge funds, whose quarterly 13F filings we analyze and determine their collective sentiment towards several thousand stocks. However, 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).
Cynapsus Sells Itself, Shares More Than Double
Cynapsus Therapeutics Inc (NASDAQ:CYNA) shareholders are having a good day after the company agreed to be acquired by Sunovion Pharmaceuticals for $624 million, or $40.50 per share in cash. The transaction, which is expected to close in the fourth quarter, has been unanimously approved by Cynapsus’ Board of Directors. Sunovion is mainly buying Cynapsus for its promising drug candidate APL-130277, an on-demand potential treatment option for managing OFF episodes associated with Parkinson’s. 13 funds in our system were long Cynapsus Therapeutics Inc (NASDAQ:CYNA) at the end of the second quarter, unchanged from the end of the previous quarter.
Twitter Co-Founder Makes Interesting Remarks
Although it is still down by 17% year-to-date, Twitter Inc (NYSE:TWTR) has trended higher since May and the stock is now above all three key technical moving averages. While meaningful profits are still hard to come by, the potential scenario of Twitter being a potential M&A target is looking more and more likely as 2016 draws to an end. Fueling the speculation are recent comments made by Evan Williams, a Member of Twitter’s Board and one of the company’s co-Founder’s, who said that Twitter has “to consider the right options” when asked if the company can remain independent. Jim Simons‘ Renaissance Technologies more than tripled its position in Twitter Inc (NYSE:TWTR) during the second quarter, to over 3.1 million shares at the end of June.
On the next page we’ll find out why Greif Inc, Petroleo Brasileiro SA Petrobras, and Vale SA are in the spotlight this morning.