What’s the Deal With These 5 Surging Stocks?

The markets are recuperating on Thursday, with all major U.S stock indexes, alongside oil, trading slightly up after a rough week. Among the stocks driving the market gains, we can count W W Grainger Inc (NYSE:GWW), Freeport-McMoRan Inc (NYSE:FCX), Atwood Oceanics, Inc. (NYSE:ATW), Buffalo Wild Wings (NASDAQ:BWLD), and Royal Gold, Inc USA) (NASDAQ:RGLD). Let’s take a look into the events behind the advances in these stocks, and into what the hedge funds in our database think about those companies.

Hedge fund sentiment is an important metric for assessing long-term profitability. At Insider Monkey, we track over 700 hedge funds, whose quarterly 13F filings we analyze to 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 (read more details here).

Back to Thursday’s gainers, let’s start with W W Grainger Inc (NYSE:GWW), which is trading up by more than 5.6% in the early afternoon. The company started trading ex-dividend today; on March 1st, shareholders who purchased the stock before the ex-dividend date will be paid a cash dividend of $1.17 per share on March 1.

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Among the funds in our database, the largest beneficiary will be David Blood and Al Gore’s Generation Investment Management, which reported ownership of 1.35 million shares of W W Grainger Inc (NYSE:GWW), worth about $290 million as of the end of September. The stake accounted for about 2.15% of the company’s total shares outstanding.

Next up is integrated mining company Freeport-McMoRan Inc (NYSE:FCX), which is up by almost 16% in the afternoon hours. Some analysts have attributed the surge in the stock to the weaker U.S dollar, which makes U.S products cheaper for international buyers, which benefits materials companies in particular.

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On the next page we will take a look at the reasons behind the rises seen in Atwood Oceanics, Inc. (NYSE:ATW), Buffalo Wild Wings (NASDAQ:BWLD), and Royal Gold, Inc USA) (NASDAQ:RGLD).

Atwood Oceanics, Inc. (NYSE:ATW) is also up, by about 19.4% on Thursday afternoon. Offshore drillers in general were on the rise today, as increasing oil prices helped alleviate concerns about the challenging state of the market. Some analysts also attributed the surge to the company’s fourth quarter financial results, which included earnings and revenue beats. The figures were announced after the market closed on Tuesday.

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Among the funds benefiting from this spike, we can highlight Israel Englander’s Millennium Management. As of the end of the third quarter of 2015, the firm disclosed ownership of 2.63 million shares of Atwood Oceanics, Inc. (NYSE:ATW), or about 4% of its total shares.

Buffalo Wild Wings (NASDAQ:BWLD) is another one of today’s gainers, up by more than 6.5% after the company announced its fourth quarter financial results on Wednesday evening. The restaurant operator and franchisor reported earnings of $1.49 per share, beating the Street’s consensus of $1.47 per share. However, revenue of $490.22 million missed the $508.73 million estimate.

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As of the end of September, Buffalo Wild Wings (NASDAQ:BWLD) counted 21 hedge fund supporters among those firms in our database. That represented a 19.2% quarter-over-quarter decline in hedge fund backing.

Finally, there’s Royal Gold, Inc USA) (NASDAQ:RGLD), which reported its second quarter of fiscal year 2016 financial results before the market opened, and has gained more than 14.6% since. Earnings of $0.23 per share beat estimates by $0.01, while revenue of $98.12 million came in well ahead of the $85.8 million consensus.

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Among the investment firms profiting from this surge, we can count First Eagle Investment Management, which disclosed ownership of 4.22 million shares of Royal Gold, Inc USA) (NASDAQ:RGLD) as of September 30.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned in this article.