With investors more afraid than ever before about the market’s prospects for 2016, shares of Cal-Maine Foods Inc (NASDAQ:CALM), Progress Software Corporation (NASDAQ:PRGS), Performance Sports Group Ltd (NYSE:PSG), and Textainer Group Holdings Limited (NYSE:TGH) are each on the move. Let’s take a closer look at the underlying reasons causing the buying and selling in these stocks and see what the world’s smartest investors think of each company.
While there are many metrics that investors can assess in the investment process, the hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor to beat the S&P 500 by around 95 basis points per month (see the details here).
Cal-Maine Foods Inc (NASDAQ:CALM) is 7.3% in the green today after the USDA reported the first bird flu case since June of last year. Although no egg-laying hens have been affected by the virus, traders are speculating that the probability of another epidemic is greater than before. Egg producer Cal-Maine Foods Inc (NASDAQ:CALM) benefited enormously from the previous bird flu strain, which sent egg prices soaring and Cal-Maine’s EPS higher. Given that 61% of Cal-Maine’s float is short, short covering likely had something to do with today’s rally in the face of the news.
25 elite funds in our system owned 13.3% of Cal-Maine’s shares at the end of September. That was up by three funds from the end of the second quarter.
Progress Software Corporation (NASDAQ:PRGS) is trending higher as well, by 4% today, as traders purchase the company’s stock after Reuters published an article yesterday stating that Progress is considering selling itself as part of its exploration of strategic alternatives. Progress Software Corp is working with JPMorgan Chase and has spoken to several private equity firms regarding the decision. Although Progress Software is making an effort to sell itself, there is no certainty that any deal will be completed given the shaky debt markets, however.
A sale would certainly make the 13 elite funds tracked by Insider Monkey that held Progress Software Corporation (NASDAQ:PRGS) at the end of September a little happier, however. Those 13 funds held 4.60% of the float.
On the next page we see the dark side of today’s markets as we study the activity in Performance Sports Group Ltd and Textainer Group Holdings Limited.