With all three major indexes trading higher, shares of Altera Corporation (NASDAQ:ALTR), Intel Corporation (NASDAQ:INTC), Alcatel Lucent SA (ADR) (NYSE:ALU), Nokia Corporation (ADR) (NYSE:NOK) and AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) are also registering gains today. In this article, let’s take a look at why these stocks opened higher today. We are also going to assess the hedge fund sentiment towards these stocks.
We pay attention to hedge funds’ moves because our research has shown that hedge funds are extremely talented at picking stocks on the long side of their portfolios. It is true that hedge fund investors have been underperforming the market in recent years. However, this was mainly because hedge funds’ short stock picks lost a ton of money during the bull market that started in March 2009. Hedge fund investors also paid an arm and a leg for the services that they received. We have been tracking the performance of hedge funds’ 15 most popular small-cap stock picks in real time since the end of August 2012. These stocks have returned 102% since then and outperformed the S&P 500 Index by around 53 percentage points (see more details here). That’s why we believe it is important to pay attention to the hedge fund sentiment; we also don’t like paying huge fees.
The first on the list is Altera Corporation (NASDAQ:ALTR), whose shares are up by 2% today after the Ministry of Commerce of China approved its acquisition by Intel Corporation (NASDAQ:INTC). The deal, valued at $16.7 billion, is expected to be closed on December 28 and it will allow Intel to reduce its exposure to the falling PC market and expand its presence in other segments. Intel Corporation (NASDAQ:INTC)’s stock also opened higher on the back of the news.
Hedge fund sentiment towards Altera Corporation (NASDAQ:ALTR) remained steady, as the number of hedge funds long the stock remained unchanged at 62 at the end of the third quarter. Together they hold some 24.5% of the company’s common stock while Matthew Halbower‘s Pentwater Capital Management is the largest shareholder of Altera, owning 13.85 million shares valued at $693.6 million as of the end of September. The guru upped his stake by 24% in the trimester. On the other hand, 45 funds reported long positions in Intel as of the end of September, down by three over the quarter, and amassing 2.60% of the company’s outstanding stock.
Moving on, Alcatel Lucent SA (ADR) (NYSE:ALU)’s shares have appreciated by 3.5% after the company announced plans to transform and become more agile in Italy, optimizing the delivery of new video and cloud services. Among the funds we track, Alcatel Lucent SA (ADR) (NYSE:ALU) gained some popularity during the third quarter, with a total of 11 funds reporting long positions in the company, versus 10 funds a quarter earlier. However, these funds amassed 1.0% of the company’s outstanding stock heading into the fourth quarter. Robert Emil Zoellner´s Alpine Associates reported owning 14.03 million shares of Alcatel-Lucent in its latest 13F filing, having boosted its stake by 54% over the quarter.
Along with this bullish movement, Nokia Corporation (ADR) (NYSE:NOK) shares are up today by almost 4%. Last week, Nokia said it expects the elucidation of the deal with Samsung, by which it would receive a monetary compensation. Hedge funds have been more optimistic about the stock recently, with 24 hedge funds long Nokia Corporation (ADR) (NYSE:NOK) at the end of the third quarter, up from the 23 funds long the stock at the close of the previous quarter. Jeffrey Tannenbaum ‘s Fir Tree cut its stake by 28% in the quarter to 15.97 million shares worth $108.2 million, as reported in its latest 13F filing.
Last but not least on our list is AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO), whose shares are up by 30% after the company entered into a license agreement with EUSA Pharma for cancer treatment with its tivozanib product. Under the agreement, EUSA will pay $2.5 million for the rights to the treatment and will pay royalties that could reach $394 million. Among the funds we follow, seven reported long positions in AVEO Pharmaceuticals as of the end of September, down by eight funds from a quarter earlier. Alex Denner‘s Sarissa Capital Management is the largest shareholder of the company among the investors we follow, owning 2.3 million shares valued at $2.8 million.