The markets are mixed on Tuesday morning as investors mull the implications of a summer rate hike, which send gold sinking below the $1,200-mark. However, some stocks are flying high today, including Celator Pharmaceuticals Inc (NASDAQ:CPXX), Cliffs Natural Resources Inc (NYSE:CLF), SciQuest, Inc. (NASDAQ:SQI), Tata Motors Limited (ADR) (NYSE:TTM), and Brocade Communications Systems, Inc. (NASDAQ:BRCD). Let’s find out why these stocks are surging today and analyze the latest hedge fund sentiment towards each of them.
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Jazz Pharmaceuticals Acquires Celator Pharmaceuticals
Celator Pharmaceuticals Inc (NASDAQ:CPXX)’s stock skyrocketed more than 71% after the company announced that it is being acquired by Jazz Pharmaceuticals plc – Ordinary Shares (NASDAQ:JAZZ) for $30.25 per share in cash, or approximately $1.5 billion. Back in March, the Princeton, New Jersey-based pharmaceutical company surprised investors and analysts with positive results from a trial of its leukemia drug Vyxeos. The stock surged by more than 400% after the announcement of the results. In a statement, Bruce Cozadd, Jazz’s CEO, said that Vyxeos, for which Celator is set to apply for approval, will allow the company to add a major revenue stream in the future. Shares of Jazz Pharmaceuticals are flat in trading today.
As of the end of the first quarter of 2016, 19 hedge funds were long Celator Pharmaceuticals Inc (NASDAQ:CPXX), up from just 3 hedge funds a quarter earlier. Behzad Aghazadeh’s VenBio Select Advisor owns more than 1.4 million shares of the company.
Cliffs Natural Resources Gets New Contract from ArcelorMittal
Shares of Cliffs Natural Resources Inc (NYSE:CLF) have soared by more than 37% today after the company announced a new agreement with ArcelorMittal SA (ADR) (NYSE:MT) to supply the company with iron ore pellets until 2026. The contract sets a limit of minimum tonnage of pellets at 7 million long tons, which is higher than the limit set in the previous two contracts between the two companies. ArcelorMittal SA is the biggest customer of the Ohio-based mining company. J.P. Morgan also upgraded its rating on Cliffs Natural Resources to ‘Overweight’ from ‘Neutral’ on Tuesday, amid better-than-expected steel prices and the new contract with ArcelorMittal.
Robert Henry Lynch’s Aristeia Capital is one of the biggest stakeholders in Cliffs Natural Resources Inc (NYSE:CLF) as of the end of first quarter, with ownership of more than 4.6 million shares of the company. It is one of the 14 hedge funds in our database which had positions in the company at that time.
We will analyze why SciQuest, Tata Motors and Brocade Communications are gaining ground today on the next page.
Accel-KKR Acquires SciQuest
SciQuest, Inc. (NASDAQ:SQI)’s stock has advanced by 32% today after the company agreed to be acquired by Accel-KKR, a California-based, technology-focused private equity firm, for $509 million. Accel-KKR will pay $17.75 per share in cash, according to the terms of the deal. In a statement, SciQuest’s CEO Stephen Wiehe said that the company will continue to expand its solutions suite, innovation and efficiency. The deal is expected to close in the third quarter of 2016, assuming the necessary shareholder and regulatory approval.
As of the end of March, 16 hedge funds that we track held approximately $101 million worth of positions in SciQuest, Inc. (NASDAQ:SQI). Michael Murphy and Daniel Donoghue’s Discovery Group owned more than 1.7 million shares of the company on March 31.
Tata Motors Beats Estimates
Tata Motors Limited (ADR) (NYSE:TTM)’s stock has surged by more than 13% today after the company posted better than estimated first quarter financial results. The Mumbai, India-based automobile company’s profit tripled quarter-over-quarter to INR51.7 billion ($771 million), while analysts had estimated just INR35.3 billion ($526 million) in profit for the quarter. Jaguar Land Rover sales surged by 28%, giving a major boost to the company’s overall financial performance for the quarter. Revenue in the quarter came in at INR806 billion ($1.20 billion), representing a 16% rise from a year earlier.
Out of the 766 funds tracked by Insider Monkey, 15 were shareholders of Tata Motors Limited (ADR) (NYSE:TTM) as of the end of the first quarter, with their investments being valued at $466 million. Ken Fisher’s Fisher Asset Management holds more than 8.7 million shares of the company as of the end of March.
Goldman Sachs Ups Price Target on Brocade Communications Systems
Goldman Sachs raised its price target on Brocade Communications Systems, Inc. (NASDAQ:BRCD) to $10 from $9 after the completion of the company’s acquisition of Ruckus Wireless. The analysts expect EPS dilution of $0.06 during fiscal year 2016, with EPS to be accretive during fiscal year 2017. For now, the investment firm has maintained a ‘Neutral’ rating on the stock. Brocade Communications Systems, Inc. (NASDAQ:BRCD) announced the completion of its deal to acquire Ruckus Wireless last week, for $6.45 per share in cash and 0.75 shares of Brocade.
Within our database, 36 hedge funds were long Brocade Communications Systems, Inc. (NASDAQ:BRCD) as of the end of the first quarter, up from 29 funds a quarter earlier.