The bulls on the Street aren’t dead just yet, as the Dow Jones is up by over 150 points and the S&P is 1% in the green in early afternoon trading. Among the big gainers pushing the indexes are Pfizer Inc. (NYSE:PFE), Multi-Fineline Electronix, Inc. (NASDAQ:MFLX), Altisource Portfolio Solutions S.A. (NASDAQ:ASPS), and AMN Healthcare Services, Inc. (NYSE:AHS). Let’s find out why investors are buying these stocks and see what hedge funds have been doing with them lately.
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).
Leading today’s pharma surge is Pfizer Inc. (NYSE:PFE), whose shares are 2.4% in the green on the news that the company has acquired Treerly Health Co., Ltd., and its family of Treerly products for an undisclosed amount. Treerly products are very popular in China, where the brand is one of the top healthcare trademarks in the segment of women’s nutritional healthcare. Experts believe the acquisition will accelerate Pfizer Inc. (NYSE:PFE)’s OTC growth initiatives in that country. Pfizer Consumer Healthcare Asia Pacific president Keith Choy commented:
“The acquisition of the Treerly brand and its family of products will enhance the portfolio of dietary supplements we offer to our retail customers in China and will enable us to help more consumers improve their health and well-being. The addition of the Treerly products will also make it possible to leverage our existing sales and marketing capabilities and be more efficient in launching future innovations for consumers in China.”
Traders could also be bidding up Pfizer because of a Bloomberg article stating that Pfizer is considering unloading the infusion pump division of Hospira, which it acquired last year, for about $2 billion. Of the around 730 elite funds we track, 97 funds owned $6.09 billion of Pfizer Inc. (NYSE:PFE) at the end of September, up from 85 funds and $4.66 billion on June 30.
Multi-Fineline Electronix, Inc. (NASDAQ:MFLX) shares are 6% higher today as the stock rebounds from its big 21% drop yesterday. Multi-Fineline Electronix, Inc. (NASDAQ:MFLX) fell on Wednesday because the company lowered its fourth-quarter revenue guidance to $169 million from the previous $170 million-to-$200 million due to softness in the company’s smartphone segment. The company also expects earnings to be break-even or slightly negative for the first quarter of 2016. Shares of the company are rallying today because Multi-Fineline Electronix trades for a book value of 0.88 and at just 7.31-times forward earnings estimates. Jim Simons’ Renaissance Technologies and Cliff Asness’ AQR Capital Management were among the 17 elite funds that held shares of the company at the end of the third quarter.
On the next page we examine the latest on Altisource Portfolio Solutions SA and AMN Healthcare Services Inc.