With the Dow Jones index up by 100 points and crude futures very volatile, Plains All American Pipeline, L.P. (NYSE:PAA), Plains GP Holdings LP (NYSE:PAGP), Biocept Inc (NASDAQ:BIOC), Twitter Inc (NYSE:TWTR), and Intrawest Resorts Holdings Inc (NYSE:SNOW) are showing some impressive strength today, as investors push each stock markedly higher in intraday trading. Let’s take a closer look at what has investors excited and check out what hedge funds feel about these stocks as well.
Why do we track hedge fund activity? From one point of view we can argue that hedge funds are consistently underperforming when it comes to net returns over the last three years, when compared to the S&P 500. But that doesn’t mean that we should completely neglect their activity. There are various reasons behind the low hedge fund returns. Our research indicated that hedge funds’ long positions actually beat the market. In our back-tests covering the 1999-2012 period hedge funds’ top small-cap stocks edged the S&P 500 index by double digits annually (see the details here).
Things aren’t as bad as feared in the MLP sector, as Plains All American Pipeline, L.P. (NYSE:PAA) and Plains GP Holdings LP (NYSE:PAGP) are up by 12.6% and 8% respectively in morning trading, as investors buy following the announcement that Plains All American Pipeline, L.P. (NYSE:PAA) will maintain its $0.70 quarterly dividend. Likewise, Plains GP Holdings LP (NYSE:PAGP) announced that it will keep its $0.231 per share dividend the unchanged as well. After Kinder Morgan Inc (NYSE:KMI) whacked its dividend by 75% last month, many midstream energy investors feared that other companies would follow Kinder Morgan’s lead and trim their payouts. With the dual announcements today, sentiment around the sector is definitely improving. Making matters even better, Plains All American Pipeline also announced that it will be selling $1.5 billion in convertible preferred securities to cover its financing needs for 2016 and some of 2017.
Shares of molecular diagnostics company Biocept Inc (NASDAQ:BIOC) are almost 14% higher on the news that the company has entered into an agreement with Blue Cross Blue Shield of Illinois through which the latter’s eight million members will have access to Biocept’s broad offerings for liquid biopsy testing. CEO Michael W. Nall said:
“BCBS IL is the largest health plan in Illinois and is our first agreement with a plan in the Blue Cross Blue Shield system. We view this agreement as another indication of the growing awareness by healthcare providers of the important role liquid biopsy can have in the treatment of patients with cancer. For Biocept, gaining health plan coverage for our tests is a key aspect of our reimbursement strategy.”
Biocept Inc (NASDAQ:BIOC) doesn’t have many hedge fund fans however, as only one elite fund that we track owns shares of it as of the end of September. That fund held $53,000 worth of shares.
On the next page, we examine what’s happening with Twitter Inc and Intrawest Resorts Holdings Inc.
Twitter Inc (NYSE:TWTR) rose above the crucial $20 per share level this morning before retreating, as the stock remains highly volatile. Although other social media companies such as Instagram and Snapchat have surpassed Twitter Inc (NYSE:TWTR) in terms of growth, Twitter is still the go-to app for many celebrities and politicians. The company has loads of potential as a result and just needs to find the right monetization strategy to send shares higher again. Hedge funds are not overly optimistic, with the number of elite funds holding Twitter shares falling by 20 quarter-over-quarter to 27 as of the latest 13F reporting period.
It’s been a good Tuesday for Intrawest Resorts Holdings Inc (NYSE:SNOW) shareholders, as shares of the company have popped 22% on the news that it is commencing a modified Dutch auction self-tender offer to purchase up to $50 million of its common stock with cash. Under terms of its offer, which will expire on February 10 (unless extended or canceled), Intrawest Resorts Holdings Inc (NYSE:SNOW) will purchase its stock for a price not greater than $10 but no less than $9, subtracting applicable withholding taxes and without interest.