What Has Investors Excited About These 5 Stocks Today?

U.S stocks are enjoying a strong day today as the U.S. dollar declines to its lowest levels in eight months and commodity prices rise. Among the most notable stocks making upward moves today are Chesapeake Energy Corporation (NYSE:CHK), Vale SA (ADR) (NYSE:VALE), Can Fite Biopharma Ltd (ADR) (NYSEMKT:CANF), Cliffs Natural Resources Inc (NYSE:CLF), and Barclays PLC (ADR) (NYSE:BCS). In this article we’ll examine why these stocks are being bought today and what top investors think about them.

At Insider Monkey, we track around 785 hedge funds and other institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details about our small-cap strategy).

Chesapeake Energy Corporation (NYSE:CHK) has gained 13% today after the company announced an amendment to its $4.0 billion secured revolving credit facility agreement maturing in 2019. Following a review by the company’s bank syndicate group, its borrowing base has been reaffirmed at $4.0 billion. The oil and gas company has postponed the redetermination of its next scheduled borrowing base until June 2017. Among the highlights of the amendment is that it provides temporary covenant relief, as the facility’s senior secured leverage ratio will be suspended until September 2017. Furthermore, Chesapeake Energy Corporation (NYSE:CHK) has agreed to enlist additional assets as collateral, with the amendment now including a collateral value coverage test which could put a cap on its borrowing capacity if the collateral coverage ratio dips below 1.25-times. The amendment comes at a time when most oil and gas producers are preparing for steep cuts in credit lines.

Out of the hedge funds tracked by Insider Monkey, 32 funds held positions in Chesapeake Energy Corporation with a total value of $716.6 million at the end of the fourth quarter. Carl Icahn’s Icahn Capital LP is one of the most notable shareholders of Chesapeake Energy, with ownership of 73 million shares of the company.

Shares of Vale SA (ADR) (NYSE:VALE) have gained more than 7% today as a congressional commission is set to decide whether or not to impeach Brazilian President Dilma Rousseff. Tensions are high in the Brazilian capital, as police ramp up security ahead of the crucial vote. Rousseff is accused of using money improperly to balance the country’s budget. Today’s vote is largely seen as symbolic, as the full lower house of Congress will vote on the impeachment this month. It’s expected that investment in Brazil and the performance of the country’s economy as a result, will improve should the President be impeached.

Out of the funds we track, 18 of them held stakes in Vale SA with a total value of $147.3 million on December 31. Howard Marks’ Oaktree Capital Management held the most notable stake, of more than 9.00 million shares of the company.

On the following page we’ll examine the gains witnessed in three other stocks today.

Shares of Can Fite Biopharma Ltd (ADR) (NYSEMKT:CANF) have gained 7% today after the company announced that its candidate drug CF602 showed positive results in achieving full recovery from erectile dysfunction. The company plans to submit an Investigational New Drug (IND) application to the U.S. Food and Drug Administration (FDA) for CF602 in the fourth quarter. It will also start a Phase I trial after IND approval. The erectile dysfunction drug from the Israel-based biopharmaceutical company has huge potential, as PDE5 inhibitors, the drugs currently in widespread to treat erectile dysfunction, do not suit a wide range of patients and have thus failed to capture a significant market segment. None of the investors in our system held shares of Can Fite Biopharma Ltd (ADR) (NYSEMKT:CANF) on December 31.

Cliffs Natural Resources Inc (NYSE:CLF)’s stock has surged 6% today after Australia’s Department of Industry, Innovation & Science published a bullish iron ore outlook on Friday afternoon. The department upgraded iron ore to $45 per metric ton for 2016, from $41.30 per ton. The gains today have pushed the stock to 116% gains for the year, after a very strong March helped by rising iron ore prices. Overall, 15 hedge funds out of those tracked by Insider Monkey held positions in Cliffs Natural Resources at the end of 2015. Jim Simons’ Renaissance Technologies owned more than 6.00 million shares of the company at that time.

Lastly, Barclays PLC (ADR) (NYSE:BCS)’s stock has gained 3.5% today after Bloomberg reported that the holding company plans to sell approximately $14.8 billion worth of loans at its Italy segment. The move comes as the bank focuses on its investment and corporate banking operations overseas. The source quoted Alessandra Perrazzelli, Barclay’s Italy country chief, who said that the bank has started to dispose its performing and non-performing loans as the last step of the bank’s exit plan from the Italian retail business.

Out of the hedge funds in our system, 12 held long positions in Barclays PLC (ADR) (NYSE:BCS) on December 31 with a total value of approximately $275.4 million. Billionaire Ken Fisher owns just over 20.00 million shares of the bank, accounting for the bulk of the collective investment in it among the firms that we monitor.

Disclosure: None