Why Valeant, Tesla, Citrix Systems, Ruby Tuesday, and Stellar Biotechnologies Are in the Spotlight

Although the FOMC meets on Tuesday and Wednesday, the market hasn’t been as volatile as it used to be. In previous quarters, the market would often sell off during the preceding days, only to rally when the Fed revealed that it would be accommodative. Now, the market has basically been in bull rally mode, and volatility is low.

While the broader market might not be as volatile as it used to be, shares of five stocks, Valeant Pharmaceuticals Intl Inc (NYSE:VRX), Tesla Inc (NASDAQ:TSLA), Ruby Tuesday, Inc. (NYSE:RT), Stellar Biotechnologies Inc (NASDAQ:SBOT), and Citrix Systems, Inc. (NASDAQ:CTXS), are nevertheless in the spotlight. Let’s analyze why each stock is trending and see how elite funds are positioned among them.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 39.7% gains over the past 12 months and outperformed the 24.1% gain enjoyed by the S&P 500 ETFs. Our enhanced small-cap hedge fund strategy returned more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points over the last 4.5 years (see details here).

Valeant Pharmaceuticals Intl Inc (NYSE:VRX) shares are down sharply after CNBC reported that Bill Ackman’s Pershing Square had exited out of its position in the pharmaceutical giant, selling 27.2 million shares for $11 a piece. Ackman was previously a big bull of the company and believed that Valeant Pharmaceuticals Intl Inc (NYSE:VRX) could be turned around. Although the fund also sold for tax-loss purposes, it seems that Ackman believes there are better buys out there. Valeant has a considerable debt load that burdens the company.

Tesla Inc (NASDAQ:TSLA) is in the spotlight after Andrew Left of Citron Research revealed that he covered his short on Tesla Inc (NASDAQ:TSLA). A long time bear, Left apparently switched to flat due to the fear that Tesla bulls might use Intel’s recent agreement to purchase Mobileye as an excuse to squeeze the bears. Given the bull market, shorting is extremely dangerous, especially for cult stocks such as Tesla. 38 elite funds had a bullish position in Tesla Inc (NASDAQ:TSLA) at the end of the fourth quarter, up 4 funds from the previous quarter.

On the next page, we examine Ruby Tuesday Inc, Stellar Biotechnologies Inc, and Citrix Systems Inc.

Ruby Tuesday, Inc. (NYSE:RT) popped in after-hours on Monday after the company announced that it will explore strategic alternatives in order to maximize shareholder value. The company’s board will consider all alternatives including a potential sale or merger, and has retained UBS as its financial advisor to assist in the process. Ruby Tuesday also announced preliminary financial results for the third quarter, with same restaurant sales down 4% and total revenue of $225.7 million. 15 elite funds were long Ruby Tuesday, Inc. (NYSE:RT) at the end of the fourth quarter.

Traders are watching Stellar Biotechnologies Inc (NASDAQ:SBOT) after shares of the company moved in after hours on Monday. According to Reuters, Stellar and Matrivax have signed an agreement for transferring vaccine know-how and technology. In return for transferring the vaccine tech, Stellar ‘will receive an upfront fee from Matrivax as well as a percentage of certain fees, milestone payments, sublicensing income and royalties that are paid by Matrivax to the University of Guelph in consideration of the license granted to Matrivax under the patent rights’. No elite funds that we track were long Stellar Biotechnologies Inc (NASDAQ:SBOT) at the end of December. It is unclear what the financial impact of the deal will be.

Citrix Systems, Inc. (NASDAQ:CTXS) is on many watch-lists after Bloomberg reported that the company is working with various advisers, including Goldman Sachs, on a possible sale. Although PE firms would be a natural fit, Citrix’s sizable valuation may make it harder to get a deal through the finish line. 35 elite funds were long Citrix Systems, Inc. (NASDAQ:CTXS) at the end of December, down 3 funds from the previous quarter.

Disclosure:None