Here’s Why Lipocine Inc. (LPCN), Zillow Group Inc. (ZG) and Three Other Stocks Are Gaining Ground Today

The US stock market is trading in negative territory following jobs data that showed that the US economy added 156,000 jobs in September, slightly lower than expected, while the unemployment rate inched up to 5%. Wall Street is now trying to assess how the data will impact the Fed’s decisions regarding the interest rates in the next couple of months.

Meanwhile, a number of stocks, including Lipocine Inc. (NASDAQ:LPCN), Zillow Group Inc. (NASDAQ:ZG), Etsy Inc. (NASDAQ:ETSY), Universal Insurance Holdings Inc. (NYSE:UVE), and Heritage Insurance Holdings Inc. (NYSE:HRTG), are trading higher today on the back of positive catalysts. Let’s take a closer look at these five stocks and assess the hedge fund sentiment towards them.

Hedge fund sentiment is an important metric for assessing long-term profitability. At Insider Monkey, we track over 740 hedge funds, whose quarterly 13F filings we analyze to determine their collective sentiment towards several thousand stocks. However, our research has shown that the best strategy is to follow hedge funds into their small-cap picks. This approach can allow monthly returns of nearly 95 basis points above the market, as we determined through extensive backtests covering the period between 1999 and 2012 (see more details here).

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Lipocine Inc. (NASDAQ:LPCN) stock has surged by more than 26% after HC Waiwright initiated coverage on the stock with a ‘Buy’ rating and a price target of $25. Analyst Corey Davis thinks that Lipocine’s drug delivery technology Lip’ral makes the company stand out among its peers and that its oral testosterone product that is currently under development is more advanced in comparison with topical or injectible products provided by competitors. Among the funds we track, nine funds held $11.69 million worth of Lipocine’s stock in aggregate at the end of June, having amassed 20.80% of its outstanding stock, compared to 12 investors that held $41 million worth of stock a quarter earlier.

Zillow Group Inc. (NASDAQ:ZG) stock is trading higher after Needham & Company LLC initiated coverage on the stock. Needham analyst Kerry Rice set a  a ‘Buy’ rating and $40 price target on the stock, citing expectations of an increased marketing spending from real estate agents on Zillow’s network of websites. The number of funds from our database long Zillow Group Inc. (NASDAQ:ZG) increased to 26 from 21 during the second quarter, while the total value of their holdings advanced to $714 million from $400 million.

Etsy Inc. (NASDAQ:ETSY) stock is in the green following a price target boost from Citigroup, with analyst Mark Kelley increasing the price target to $20 from $16. The analyst maintained a ‘Buy’ rating on the stock and stated that despite the rally registered by the stock (it is up by nearly 90% year-to-date), it still has more room to grow. A total of 16 investors tracked by us, were long Etsy Inc. (NASDAQ:ETSY), holding around $200 million worth of stock at the end of June, compared to 15 funds that had amassed $162 million worth of shares at the end of March.

Universal Insurance Holdings Inc. (NYSE:UVE) stock is trading 17% higher, while shares of Heritage Insurance Holdings Inc. (NYSE:HRTG) are 7% in the green. In fact, he stocks of most insurance companies that have exposure to Florida are trading higher as the impact of the Hurricane Matthew have been revised downwards. Heritage Insurance Holdings has issued a statement, citing its Chairman and CEO Bruce Lucas, who said at the CNBC’s “Closing Bell” that the estimated losses are better than they were on Wednesday and that Heritage estimates the losses to be at $500 million, which are well below its $1.9 billion catastrophe reinsurance coverage tower. Heritage also said in the statement that “losses sustained based on the storm’s projected path can be absorbed by the insurance providers and the reinsurance industry.” At the end of June, 19 investors we track were long Universal Insurance Holdings Inc. (NYSE:UVE), down from 20 funds a quarter earlier, while the number of funds bullish on Heritage Insurance Holdings Inc. (NYSE:HRTG) inched up by one to 14 during the second quarter.

Disclosure: none