Even though oil continues to plummet, the market is rebounding on Tuesday, with all major U.S stock indexes trading up. Among the stocks driving said gains are Keryx Biopharmaceuticals (NASDAQ:KERX), ContraVir Pharmaceuticals Inc (NASDAQ:CTRV), Virgin America Inc (NASDAQ:VA), Cleco Corporation (NYSE:CNL), and Ambarella Inc (NASDAQ:AMBA). Let’s take a look into the events behind the spikes in these companies’ shares, and see what the funds in our database think about these stocks.
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 Keryx Biopharmaceuticals (NASDAQ:KERX), which is up by more than 14% in the early afternoon. The spike was a reaction to the company’s announcement that its Phase 3 study of Ferric Citrate for the treatment of iron deficiency anemia in adults with non-dialysis dependent chronic kidney disease generated positive top line results.
Among the funds that we track, 11 disclosed long stakes in Keryx Biopharmaceuticals (NASDAQ:KERX) as of the end of the fourth quarter of 2015. On December 31 these firms held about 1/3 of the company’s total shares. The fund poised to reap the largest benefits was Seth Klarman’s Baupost Group, the largest institutional investor of record at that time with 25.79 million shares valued at $130 million.
Next up is ContraVir Pharmaceuticals Inc (NASDAQ:CTRV), which is trading up by roughly 19.5% on Tuesday afternoon, following the announcement of positive results from a study of CMX157, a hepatitis B virus treatment. Results confirmed CMX157’s increased effectiveness versus other tenofovir prodrugs, including tenofovir DF (Viread®), and provided the first direct comparison to tenofovir alafenamide fumarate (TAF). “The study findings revealed that CMX157 and TAF were similarly potent against hepatitis B virus (HBV), with CMX157 trending toward higher potency… Furthermore, viral rebound studies showed that CMX157 demonstrates best-in-class duration of activity,” a press release declared.
No hedge funds in our database were long ContraVir Pharmaceuticals Inc (NASDAQ:CTRV) as of the end of the fourth quarter. However, the company counted the support of at least 32 other institutional investors on December 31.
Head to the next page for a breakdown of the big gains seen in three other stocks today.
Shares of Virgin America Inc (NASDAQ:VA) are trading up slightly, by about 0.5%, a continuation of their 10.33% run-up seen on Monday. The surge was driven by reports that the company had received buyout offers from both JetBlue Airways Corporation (NASDAQ:JBLU) and Alaska Air Group, Inc. (NYSE:ALK), after putting itself up for sale. People familiar with the matter said that the carrier is in talks with both companies and that a deal could be announced as soon as next week.
In addition to Richard Branson, Virgin America Inc (NASDAQ:VA) counts the support of several major institutional investors. Among the funds that we track, 20 held long stakes in the company at the end of the fourth quarter. The largest position among those was held by Stephen C. Freidheim’s Cyrus Capital Partners, which declared holding 10.5 million shares valued at $378 million as of the end of 2015.
Also on the rise today is Cleco Corporation (NYSE:CNL), which is up by more than 13% in afternoon trading. The spike came after the Louisiana Public Service Commission approved a $3.4 billion acquisition of the company by a group of infrastructure investors led by the Macquarie Group. In order for the deal to be approved, the acquirers threw in a few extra perks for customers, including a promise of no rate hikes until at least 2019. Cleco shareholders will receive $55.37 per share in the deal.
Among the funds that we track, 18 were long Cleco Corporation (NYSE:CNL) at the end of the fourth quarter. Among them was David Abrams’ Abrams Capital Management, which held 2.36 million shares of the company on December 31.
Finally, there’s Ambarella Inc (NASDAQ:AMBA), which is trading up by roughly 7.8% this afternoon after analysts at Morgan Stanley upgraded the stock to ‘Overweight’ from ‘Equal Weight’, while maintaining a $55 price target on it. The experts cited the recent pullback seen in the stock and bottoming business trends, as well as the retention of the company’s “leadership in video processing for high-end cameras… Other core growth segments such as autos, drones, consumer surveillance cameras, and wearables (GoPro) should continue to drive robust growth,” the report added.
As of the end of the fourth quarter, 28 funds in our database were long Ambarella Inc (NASDAQ:AMBA), and held 15% of its outstanding shares. A noteworthy position was that of Philippe Laffont’s Coatue Management; the stake comprised 890,264 shares worth almost $50 million as of December 31.
Disclosure: Javier Hasse holds no positions in any of the securities mentioned in this article.