Although the broader market is in the red on Thursday as earnings season rapidly approaches, shares of Lucas Energy, Inc. (NYSEMKT:LEI), Vivint Solar Inc (NYSE:VSLR), Viking Therapeutics Inc (NASDAQ:VKTX), and SL Industries, Inc. (NYSEMKT:SLI) are bright green. Let’s find out why investors are buying these stocks and examine what the smart money investors in our database think about them.
At Insider Monkey, we track around 785 hedge funds and 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 the details here).
Lucas Energy, Inc. (NYSEMKT:LEI) has more than doubled today on news that the company has secured $10 million of equity capital in the form of a redeemable convertible subordinated debenture with a conversion price of $3.25 per share from an institutional investor. The company could receive an additional $5 million more through an exercise of an additional warrant upon mutual consent. CEO Anthony Schnur said, “This placement demonstrates confidence in the future of Lucas Energy, Inc. (NYSEMKT:LEI) as we progress towards closing on the Segundo Resources asset purchase. Having received this commitment establishes some certainty that we can initiate growth and development activities upon closing the acquisition.” No investors in our database held shares of Lucas Energy as of December 31.
Vivint Solar Inc (NYSE:VSLR) continues to trend higher today after surging past the $3 per share mark yesterday. Although there is no major news concerning the stock, Vivint does plan to host an analyst day on April 14 that could provide investors with more details on how the company plans to deliver value in the solar market. Sunedison Inc (NYSE:SUNE) was originally supposed to purchase Vivint earlier this year but eventually abandoned the deal after experiencing sharp financial and liquidity difficulties. Ten elite funds in our system held roughly 11.1% of Vivint Solar Inc (NYSE:VSLR)’s float at the end of December.
On the next page we examine the latest activity concerning Viking Therapeutics Inc, SL Industries Inc, and Handy & Harman Ltd.
Nano-cap Viking Therapeutics Inc (NASDAQ:VKTX) has surged by more than 80% today after analysts at H.C. Wainwright initiated a ‘Buy’ rating with a $6 price target on the stock. Viking’s lead product candidate is VK5211, a non-steroidal androgen receptor modulator which is currently in phase 2 trials for the treatment of patients recovering from a hip fracture. VK5211 theoretically delivers the therapeutic benefits of testosterone without any unwanted side effects. The FDA still needs to verify the efficacy and safety of the treatment however. Viking Therapeutics Inc (NASDAQ:VKTX) is also in the final stages of preparing a potential secondary offering that could help it raise $8 million. As with all nano-caps, we urge investors to do their due diligence before investing. As with Lucas Energy, there were no long positions in this stock among the investors in our database at the end of December.
Wrapping up our coverage of gainers we turn to SL Industries, Inc. (NYSEMKT:SLI), which is up by 18% after Handy & Harman Ltd (NASDAQ:HNH) announced that it has entered into a definitive agreement to acquire it through a tender offer for $40 in cash per share. Both companies’ board of directors have approved the deal, and the acquisition offer will be consummated if the tender offer successfully gathers the majority of SL Industries’ outstanding shares and 60% of SL Industries’ shares not owned by Handy & Harman or any of its affiliates. Other customary conditions also apply. Handy & Harman Ltd (NASDAQ:HNH) chairman Warren Lichtenstein of Steel Partners said:
“We believe this transaction exemplifies our strategy of profitably growing and building upon our core business units both internally and through strategic acquisitions. Affiliates of HNH first purchased shares in SLI almost 25 years ago when the stock was selling for around $3.50 per share. SLI is a company we know well and we expect it will be a great addition to the HNH / Steel family of businesses.”
4 elite funds in our system held over one-third of SL Industries, Inc. (NYSEMKT:SLI) shares on December 31, while the same number of elite funds held 73.5% of Handy & Harman shares at the end of December, which were almost entirely held by Mr. Lichtenstein’s fund.