Why Diamondback Energy, Depomed, Las Vegas Sands and More Are Trending

With the third quarter now in the rear-view mirror and the November elections firmly in view as a potential upside/downside catalyst, many investors are wondering where the market might head next.

In addition to asking that question, investors are also eagerly watching the news flow emanating from Diamondback Energy Inc (NASDAQ:FANG), Depomed Inc (NASDAQ:DEPO), Las Vegas Sands Corp. (NYSE:LVS), MGM Resorts International (NYSE:MGM), and Wynn Resorts, Limited (NASDAQ:WYNN). In this article, we’ll take a closer look at the five companies and their associated catalysts and use the latest 13F data to see how the smart money was positioned in the equities at the end of the second quarter.

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Diamondback Energy Inc (NASDAQ:FANG) is in the spotlight after the Wall Street Journal reported that the firm is near a deal to purchase Silver Hill Energy Partners for potentially $2.5 billion. A deal could be announced as early as next week if another bidder doesn’t emerge with a better offer and the current deal doesn’t fall apart. Silver Hill owns the rights to drilling in acreage in the lucrative Permian Basin, which sports some of the lowest shale production costs in the country. Steve Cohen‘s Point72 Asset Management upped its stake in Diamondback Energy Inc (NASDAQ:FANG) by 6,455% during the second quarter to 131,100 shares at the end of June.

Traders are watching Depomed Inc (NASDAQ:DEPO) after judge Claire Cecchi of the United States District Court for the District of New Jersey ruled in favor of Depomed in the company’s patent litigation against all three filers of Abbreviated New Drug Applications for Depomed’s Nucynta franchise, Actavis, Alkem Laboratories Limited and Roxane Laboratories. With the court’s ruling, Depomed expects market exclusivity until December 2025 for Nucynta ER, Nucynta and Nucynta oral solution. The ruling is important because the Nucynta franchise accounts for roughly two-thirds of the company’s product sales. With the uncertainty removed, some investors think Depomed can proceed with its strategic alternatives, including a potential sale or merger. 23 hedge funds in our database were long $328.2 million worth of Depomed Inc (NASDAQ:DEPO) shares at the end of June, which accounted for 27.40% of the float.

On the next page, we’ll examine why investors are closely watching Las Vegas Sands, MGM Resorts, and Wynn Resorts.

Las Vegas Sands Corp. (NYSE:LVS), Wynn Resorts, Limited (NASDAQ:WYNN), and MGM Resorts International (NYSE:MGM) are in the spotlight after total Macau sales beat analyst estimates again, this time for the month of September. According to Bloomberg, gross gaming revenue for the month inched up by 7.4% year-over-year to 18.4 billion patacas ($2.3 billion). Analysts were expecting around a 4% year-over-year increase. September’s rise is the second-straight monthly rise, following August’s increase of around 1.1% year-over-year. One reason for the increase is due to new casino projects opening from Wynn and Las Vegas Sands. As for the month of October, analysts are not as bullish due to the potential for Chinese Premier Li Keqiang visiting the area.

Of the three stocks, the smart money in our system liked MGM Resorts International (NYSE:MGM) the most as of June 30, with 59 funds reporting holding stakes in the casino as of that date. Meanwhile, 23 funds were long Las Vegas Sands Corp. (NYSE:LVS) and 30 funds were shareholders of Wynn Resorts, Limited (NASDAQ:WYNN) at the end of the second quarter.

Disclosure: None