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Why Oracle (ORCL), Celator Pharma (CPXX), Peabody Energy (BTU) and Others Are Trending Today

The markets are dipping on Wednesday afternoon, as all major U.S stock indexes are trading down slightly. However, stocks were fluctuating both ways, as evidenced by five of the day’s hottest stocks. In this article, we’ll take a look at the latest news and hedge fund interest surrounding Oracle Corporation (NYSE:ORCL), Celator Pharmaceuticals Inc (NASDAQ:CPXX), Bio Blast Pharma Ltd (NASDAQ:ORPN), Mallinckrodt PLC (NYSE:MNK), and Peabody Energy Corporation (NYSE:BTU).

Our research determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor beat the S&P 500 by around 95 basis points per month (see more details here).

Let’s start with Oracle Corporation (NYSE:ORCL), which has gained almost 4% in Wednesday trading, after the company reported its third quarter of fiscal year 2016 financial results on Tuesday evening. Earnings of $0.64 per share came in $0.02 ahead of consensus estimates, while revenue of $9.01 billion missed estimates by $110 million, mostly due to FX headwinds, and in spite of the stellar growth seen in the company’s cloud business. Furthermore, Oracle added $10 billion to its stock buyback program and declared its usual $0.15 per share dividend, which will be payable on April 28 to shareholders on record as of April 14.

Boykin Curry‘s Eagle Capital Management was the largest Oracle Corporation (NYSE:ORCL) shareholder in our database at the end of the fourth quarter with 45.77 million shares, valued at more than $1.67 billion. In addition, another 52 funds in our database declared holding long stakes in the company as of December 31.

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Next up is Celator Pharmaceuticals Inc (NASDAQ:CPXX), which is trading up by more than 4.75% on Wednesday afternoon. The surge appears to be a continuation of the 484% surge seen between Monday and Tuesday, which was driven by the release of promising results in a late-stage, Phase 3 study to treat leukemia. According to the company, its drug Vyxeos considerably improved the average survival of patients with acute myeloid leukemia (AML), versus the current standard-of-care chemotherapy.

Getting in on the Celator Pharmaceuticals Inc (NASDAQ:CPXX)’s action after hours on Monday was billionaire Steve Cohen. According to a 13G filed on Tuesday, his family office Point72 Asset Management initiated a stake in the company, comprised of 2.85 million shares, which account for 8.3% of the company’s outstanding stock. Prior to the spike, the company already had the support of other major institutional investors in our database like First Eagle Investment Management, which disclosed ownership of 612,600 shares as of the end of the fourth quarter.

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Another biopharmaceutical that has registered a huge spike this week is Bio Blast Pharma Ltd (NASDAQ:ORPN), which more than doubled in price today. The surge was driven by positive results from its HopeMD Phase 2 six-month open-label clinical study in patients with oculopharyngeal muscular dystrophy (OPMD). The drug proved to not only be safe, but also tolerable for the study participants. OPMD remains untreated, but the company will seek to confirm the results obtained in a Phase 2b double blind placebo controlled study expected to start in 2017.

A fund manager that is likely happy with the results is Jacob Gottlieb. His firm, Visium Asset Management, declared holding 844,000 shares of the company as of December 31, making it the largest Bio Blast Pharma Ltd (NASDAQ:ORPN) investor of record to date.

On the other hand, we’ve got Mallinckrodt PLC (NYSE:MNK), which is trading down by more than 13% on Wednesday afternoon, adding to the 14.49% tumble seen on Tuesday. The decline was triggered by a tweet from Citron Research, which claimed that the company posed a risk equal to that of Valeant Pharmaceuticals Intl Inc (NYSE:VRX). Later on Tuesday, the firm’s founder Andrew Left appeared on CNBC and suggested that the company was even worse than Valeant. “At least Valeant can say, ‘Hey, look at our products.’ Mallinckrodt has one product that’s never been tested,” he stated.

Citron’s comments aside, Mallinckrodt PLC (NYSE:MNK) has the support of several major hedge funds. By the end of the fourth quarter, 39 firms in our database were long the stock. The largest of those stakes was held by John Paulson’s Paulson & Co, which disclosed ownership of 8.62 million shares as of December 31.

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Finally, there’s Peabody Energy Corporation (NYSE:BTU), which is trading down by more than 45% on Wednesday after the company said that it was delaying an interest payment due Tuesday, and that it may file for Chapter 11 bankruptcy as coal prices and demand continue to plummet, while regulations rise. Management explained that the firm may “not have sufficient liquidity to sustain operations and to continue as a going concern.”

David Iben‘s Kopernik Global Investors is one of the firms doubtlessly disappointed in Peabody Energy Corporation (NYSE:BTU) deteriorating financials, as it disclosed ownership of 1.04 million shares of the company worth more than $8 million as of the end of the fourth quarter.

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

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