With all three indices in the red today, shares of Onconova Therapeutics Inc (NASDAQ:ONTX), eFuture Information Technology Inc. (NASDAQ:EFUT), Childrens Place Inc (NASDAQ:PLCE), and Live Ventures Inc (NASDAQ:LIVE) are well in the green. Let’s find out why investors are buying these four stocks today.
Let’s also examine what hedge funds think of these stocks. 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. The 15 most popular small-cap stock picks among hedge funds also bested passive index funds by around 53 percentage points over the 36 month period beginning from September 2012 (see the details here).
Leading the way among today’s gainers is Onconova Therapeutics Inc (NASDAQ:ONTX), whose shares are up 11.45% in afternoon trading after the company reported positive results from a Phase 2 trial. For the Phase 2 combination trial of oral rigosertib and azacitidine for use in patients with Higher-Risk Myelodysplastic Syndromes (MDS), Onconova reported a 77% overall response rate in MDS patients, with a 84% response rate for treatment-naive patients and 64% response rate with HMA treatment-refractory patients. In addition, the study found that the combination of oral rigosertib and azacitidine has been well tolerated so far, with side effects of the combined regimen similar to the side effects of azacitidine. Onconova Therapeutics Inc (NASDAQ:ONTX) plans to provide further information on its next steps for the combination development program at an investor event on December 16. The funds from our database are overall ambivalent on the stock, as just 2 funds (out of the around 730 we track) reported stakes with an aggregate value of $127,000 in Onconova in the third quarter.
In other news, eFuture Information Technology Inc. (NASDAQ:EFUT) continues to be volatile, as shares of the company have gained 7% so far today. eFuture Information Technology Inc. (NASDAQ:EFUT)’s extremely small float of 0.26 million shares and the considerable amount of shares short have no doubt made the stock a day trader and trading algo favorite as the company’s stock price swings one way or the other very quickly. Shares of the company rallied substantially in recent weeks after a Hong Kong company disclosed a 50.51% stake in a 13D filing, but have recently retraced on the lack of other catalysts. Given the stock’s volatility and lack of fundamental data-points, we would stay on the sidelines on this one. According to our data, Jim Simons’ Renaissance Technologies was the only fund from our database with a stake in the company in the third quarter, with a holding of 25,700 shares.
On the next page, we take a closer look at Childrens Place Inc and Live Ventures Inc.
Next on our list of gainers is Childrens Place Inc (NASDAQ:PLCE), whose shares surged 11.7% after the company reported third quarter EPS of $1.93, beating analyst estimates by $0.01 per share. Although comparable retail sales retreated by 3% year-over-year, Childrens Place Inc (NASDAQ:PLCE)’s adjusted gross margin rate inched up 0.6 percentage points to 39.6% and its adjusted operating margin rate rose 0.8 percentage points to 13.1%. Guidance is solid with management expecting fourth quarter adjusted EPS to be in the range of $0.93 to $1.03, with comparable retail sales rising by low single digits. Joel Greenblatt’s Gotham Asset Management owned 370,558 shares of Childrens Place at the end of September.
Lastly, Live Ventures Inc (NASDAQ:LIVE) shares inched up modestly in afternoon trading after the company announced it had completed the purchase of the remaining 20% of Marquis Industries in a move that will enable Live Ventures to potentially make use of around $10 million in net operating losses in future years. Marquis is a high end residential carpet maker and specialty yarns manufacturer. Three funds among those we track reported stakes worth $78,000 in Live Ventures Inc (NASDAQ:LIVE) during the latest round of 13F filings.