2 Stocks That Are Rising Due to the Tragic Orlando Massacre; Plus 3 Other Hot Stocks

After briefly rallying into the green, the S&P 500 and Dow Jones are again falling. As of noon, the Dow is down by 64 points, while the S&P 500 is off by over 0.4% and the Nasdaq is 0.68% in the red. Among the stocks still in the green today are Twitter Inc (NYSE:TWTR), Eleven Biotherapeutics Inc (NASDAQ:EBIO), Smith & Wesson Holding Corp (NASDAQ:SWHC), COPsync Inc (NASDAQ:COYN), and Netflix, Inc. (NASDAQ:NFLX). Let’s examine why traders are maintaining their positivity for these equities today and see what the smart money in our database thinks of each stock.

Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see the details here).

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Twitter a Beneficiary of Social Media Sector Buzz

Twitter Inc (NYSE:TWTR) is 6% higher today after Microsoft Corporation (NASDAQ:MSFT) announced it is buying LinkedIn Corp (NYSE:LNKD) for $26.2 billion, or $196 per share. Although Twitter Inc (NYSE:TWTR) doesn’t compete against LinkedIn, it is also a social media company and some investors think Microsoft’s purchase could make a potential sale of Twitter more likely. If Twitter is sold to another company, it will likely be at a big premium to the spot price. Of the 766 elite funds that we track, 27 owned long positions in Twitter Inc (NYSE:TWTR) valued at $403.17 million, which accounted for 3.50% of the stock’s float on March 31.

Eleven Biotherapeutics Up on Development Deal

Eleven Biotherapeutics Inc (NASDAQ:EBIO) shares have surged by almost 50% after the nano-cap entered into an exclusive license agreement with Roche concerning its IL-6 antagonist antibody technology. Under the terms of the deal, Eleven Biotherapeutics will receive $7.5 million in upfront payments, future milestone payments of up to $262.5 million, and royalties in exchange for granting an exclusive worldwide license to Roche to develop and commercialize EBI-031. The treatment, a humanized monoclonal antibody that potently binds IL-6 and inhibits all known forms of IL-6 cytokine signaling, is currently being developed for the potential treatment of ocular diseases. The deal also includes all other IL-6 antagonist antibody technology owned by Eleven Biotherapeutics. Two funds in our database owned shares of Eleven Biotherapeutics Inc (NASDAQ:EBIO) at the end of the first quarter.

On the next page we examine Smith & Wesson, COPsync, and Netflix are on the rise today.

Gun Maker’s Shares Soar After Orlando Massacre

Smith & Wesson Holding Corp (NASDAQ:SWHC) shares are up by over 6% after a shooter killed 50 people at an Orlando nightclub this weekend. The death count makes the Orlando shooting the most tragic shooting event in U.S. history. Traders are buying Smith & Wesson Holding Corp (NASDAQ:SWHC) because they anticipate more consumers will buy guns to protect themselves against home invasions or future types of similar incidents (although to the latter point, it should be noted that the massacre took place in a so-called “gun-free zone”). Some people may also rush out to buy guns in anticipation of the government tightening gun laws going forward. The number of funds in our system with holdings in the gun maker fell by three to 24 during the first quarter.

Nano-cap Rallies After Tragic Sunday Event 

COPsync Inc (NASDAQ:COYN) shares are 22% in the green due to the tragic shooting in Orlando that killed 50 people this weekend. COPsync operates the COPsync911 threat-alert service for a variety of government and at-risk facilities. The company also operates the nation’s only system connecting law enforcement officers and agencies nationwide and providing access to a national database of non-adjudicated law enforcement information and real-time communication capability to connected agencies. Although shares of COPsync have rallied, it isn’t clear if there will be additional demand for the service due to the event. COPsync Inc (NASDAQ:COYN) wasn’t held by any funds in Insider Monkey’s database at the end of March.

Netflix Rallies on Buzz

Netflix, Inc. (NASDAQ:NFLX) is 2% higher after a trailer for the company’s Stranger Things generated substantial positive feedback across several social media sites. Stranger Things is a supernatural series that will be available for binge watching beginning July 15. Should the show achieve a strong reception, it will result in a wider moat against future competitors for Netflix. Andreas Halvorsen‘s Viking Global was one of the top shareholders of Netflix, Inc. (NASDAQ:NFLX) at the end of March.

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