Why Microsoft (MSFT), Axiall (AXLL), Sony (SNE), Seagate & Energous Are Surging Today

The markets continue to recuperate on Friday, as all major U.S stock indexes gained about 1.5%. Among the stocks driving these surges are Microsoft Corporation (NASDAQ:MSFT), Axiall Corp (NYSE:AXLL), Sony Corp (ADR) (NYSE:SNE), Seagate Technology PLC (NASDAQ:STX), and Energous Corp (NASDAQ:WATT), all of which were trading up in afternoon trading. Let’s take a look at the events behind said surges, and at what the hedge funds in our database think about the companies in question.

At Insider Monkey, we track around 730 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details about our small-cap strategy).

Back to Friday’s gainers, we’ve got Microsoft Corporation (NASDAQ:MSFT), which is trading up by almost 5.75% following its earnings call. After the market closed on Thursday, the tech behemoth reported earnings of $0.78 per share, $0.09 above the Street’s consensus estimate, on sales of $25.69 billion, which also beat expectations of $25.11 billion in revenue. The company attributed the strong results to robust sales of cloud software products.

Microsoft Corporation (NASDAQ:MSFT) is quite a popular company among the funds we keep track of. As of the end of the third quarter, 113 funds in our database were long the stock. One of the biggest positions was the one held by Ken Fisher’s Fisher Asset Management. After increasing its holding by 1% over the fourth quarter of 2015, the firm held 18.2 million shares, worth more than $1 billion.

Next up is Axiall Corp (NYSE:AXLL), up by more than 83% today. The spike was triggered by news that Westlake Chemical Corporation (NYSE:WLK) has made a hostile takeover offer to buy the company for roughly $2.9 billion in cash and stock, or $20 per share. However, Westlake said that Axiall’s Board “summarily rejected” the proposal. The stock is currently trading around $18.

And it seems like it is not only Westlake that likes Axiall Corp (NYSE:AXLL). Among the funds that we track, 30 disclosed long stakes in the company as of the end of the third quarter. In fact, these 30 firms own almost 25% of the company’s outstanding stock.

On the next page, will take a look into the news driving the surges in the shares of Sony Corp (ADR) (NYSE:SNE), Seagate Technology PLC (NASDAQ:STX), and Energous Corp (NASDAQ:WATT).

Another big gainer in Friday trading is Sony Corp (ADR) (NYSE:SNE), up by nearly 18% in the afternoon hours, after the Japanese electronics company reported better-than-expected third quarter of fiscal year 2015 financial results. The Japanese firm posted GAAP earnings of ¥93.33 ($0.78) per share, up by 21.3% year-over-year. The surge was mostly driven by lower operating costs, strong PlayStation 4 sales and a resurgence in its Pictures business, which saw sales rise by 26.9%.

Among the funds in our database, Mario Gabelli’s GAMCO Investors disclosed the largest position in Sony Corp (ADR) (NYSE:SNE) as of the end of the third quarter, holding 6.06 million shares worth almost $150 million at that time. Another fund that seemed quite bullish was Allan Mecham and Ben Raybould’s Arlington Value Capital, which started a new stake in the company during the quarter, comprised of 2.21 million shares.

Seagate Technology PLC (NASDAQ:STX) is up by about 8.5% on Friday afternoon. Before the bell rang, the mid-cap electronic data storage products provider reported fiscal year 2016 second quarter earnings of $0.82 per share on revenue of $2.99 billion, beating the Street’s consensus of $0.71 per share and $2.96 billion. Even though the outlook that management provided for the current quarter was pretty disappointing, the company assured that it was implementing “aggressive” cost cutting initiatives and pointed out that, over the fiscal second quarter, enterprise sales had risen.

As of the end of the third quarter, Seagate Technology PLC (NASDAQ:STX) counted 31 hedge funds backers among those we track. In this group is David Harding’s Winton Capital Management, which boosted its stake by 39% over the quarter, to 2.65 million shares worth slightly less than $120 million.

Finally, there’s Energous Corp (NASDAQ:WATT), up by about 32% in Friday trading. Sources have suggested that the surge was prompted by a Bloomberg report suggesting that Apple Inc. (NASDAQ:AAPL) is working with some partners to develop an over-the-air wireless charging technology that could be used on its devices as of 2017. While Energous Corp (NASDAQ:WATT) was not singled out in the article, Bloomberg’s description of the technology reminds of the company’s WattUp system. In addition, Energous recently said that it had inked a deal with a tier-1 company, which many have speculated to be Apple.

Energous Corp (NASDAQ:WATT) is not particularly popular among the institutional investors that we track. In fact, none of the funds in our database declared being long the stock as of the end of the third quarter of 2015. The largest institutional investor of record was L.A-based Doheny Asset Management, L.L.C., with 868,025 shares, or almost $6 million in stock.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned in this article.