Hedge Funds Are Betting on These Momentum Stocks

Cytec Industries Inc. (NYSE:CYT)

-Investors with Long Positions (as of September 30): 34

-Aggregate Value of Investors’ Holdings (as of September 30): $849.83 Million

The number of smart money investors with stakes in Cytec Industries Inc. (NYSE:CYT) increased to 34 from 16 during the June-to-September period. These investment vehicles own slightly more than 16% of Cytec’s outstanding shares as of September 30. On July 29, the global specialty materials and chemicals company announced that it had sealed a merger agreement with Brussels-based Solvay SA, under which the Belgian chemicals company is set to acquire Cytec for approximately $5.5 billion. At the end of November, Cytec’s shareholders approved the merger, as the proposal received support from 99.3% of the votes cast. Hence, each shareholder of Cytec will receive $75.25 per share in cash upon the completion of the merger. D.E. Shaw & Co. L.P., founded by David E. Shaw in 1988, acquired a new stake of 1.20 million shares in Cytec Industries Inc. (NYSE:CYT) during the September quarter.

StanCorp Financial Group Inc. (NYSE:SFG)

-Investors with Long Positions (as of September 30): 23

-Aggregate Value of Investors’ Holdings (as of September 30): $438.05 Million

Is StanCorp Financial Group Inc. (NYSE:SFG) engaged in a merger and acquisition transaction as well? The number of hedge funds observed by Insider Monkey with positons in the company grew to 23 from nine during the September quarter, amassing 9.10% of its shares. Yes, the provider of financial products and services is being acquired by Meiji Yasuda Life Insurance Company for $115.00 per share in cash. StanCorp’s shareholders had the chance to vote against the aforementioned deal at a special shareholder meeting that took place on November 9, but more than 99% of the votes cast were in favor of the transaction. The Japanese insurer is joining the camp of other national peers that have been expanding abroad to overcome the struggling domestic market. Phill Gross and Robert Atchinson’s Adage Capital Management initiated a new position in StanCorp Financial Group Inc. (NYSE:SFG) during the third quarter, which was comprised of 630,100 shares on September 30.

Alphabet Inc. (NASDAQ:GOOGL)

-Investors with Long Positions (as of September 30): 129

-Aggregate Value of Investors’ Holdings (as of September 30): $11.30 Billion

Last but not least, Alphabet Inc. (NASDAQ:GOOGL) received substantial investor interest from the hedge funds monitored by our team in the third quarter. 129 smart money investors had stakes in the tech giant at the end of the third quarter, compared to 115 registered in the previous one. The value of their stakes increased to $11.30 billion from $8.19 billion quarter-over-quarter. Class A shares of Alphabet are up 46% for the year, after advancing 21% since the beginning of the current quarter. Thus, it appears that hedge funds made the right move by piling up more shares of Alphabet during the turbulent third quarter. At the same time, most financial hubs have great expectations on Alphabet’s future potential, assigning the stock price targets of as much as $940. Meanwhile, the stock is trading at a rather rich trailing P/E ratio of 36.13, which however does not reflect the growth potential of this fast-developing company. Andreas Halvorsen’s Viking Global owns 2.53 million Class A shares and 1.12 million Class C shares in Alphabet Inc. (NASDAQ:GOOGL) as of September 30.

Disclosure: None