Here’s Why These Five Stocks Are Gaining Ground Today

The US stock market inched up higher on Wednesday, partly fueled by an increase in energy stocks, which are gaining ground following a rebound in oil prices.

Among the stocks that are outpacing the market today are Genworth Financial Inc (NYSE:GNW), Cesca Therapeutics Inc (NASDAQ:KOOL), Oclaro, Inc. (NASDAQ:OCLR), Sizmek Inc (NASDAQ:SZMK) and 3D Systems Corporation (NYSE:DDD). So, let’s take a look into the events behind the growth of these stocks. In addition, we are going to assess the hedge fund sentiment towards the companies in question.

At Insider Monkey, we track around 765 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details).

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Genworth Financial Posts Gains On Modest Beat

Let’s begin with Genworth Financial Inc (NYSE:GNW), whose stock has surged by over 32%, which is its largest intraday surge in more than six years, driven by a top- and bottom-line beat for the second quarter. The company posted EPS of $0.25 and revenue of $2.24 billion,which topped the consensus estimates by $0.04 and $160 million, respectively. As of the end of the first quarter, 22 funds among those we track are long Genworth Financial Inc (NYSE:GNW), down from 28 registered at the end of the previous quarter. The largest stake was owned by Christopher Pucillo‘s Solus Alternative Asset Management, which last declared holding 15 million shares, up by 58% quarter-over-quarter.

Saved Limbs Help Cesca Climb

Next up is Cesca Therapeutics Inc (NASDAQ:KOOL), which has gained around 29% on the announcement of “promising results” from its 40-month follow-up for patients that had participated in its late stage, “no option” critical limb ischemia (CLI) feasibility study. Many of the patients treated with autologous bone marrow-derived stem cells reported successful limb salvage and, 40 months later, said they had experienced “a significant overall reduction in rest pain and improvements in quality of life,” the company said in a statement. “These longer-term, post-study follow-up results not only reinforce our belief that autologous bone marrow derived stem cell therapy using our SurgWerks-CLI system is effective, they also suggest that it is durable,” said Study Director Dr. Venkatesh Ponemone. Only one fund in our database disclosed a long equity position in Cesca Therapeutics Inc (NASDAQ:KOOL) as of the end of the first quarter of 2016, Hal Mintz’s Sabby Management, which owned 111,094 shares worth $432 million.

Strong Results, Guidance Push Oclaro Up

Shares of Oclaro, Inc. (NASDAQ:OCLR) are trading up by 12%, driven by the announcement of the company’s fiscal fourth quarter financial results. The small-cap tech firm posted EPS of $0.11 on revenue of $125.18 million for the quarter, beating the Street’s consensus by $0.05 and $5.52 million, respectively. Moreover, the gross profit margin, on a non-GAAP basis, hit a new record of 32.4%. For the ongoing quarter, management said it expects revenue of $126 million to $134 million, above analysts’ estimate of $118.6 million, and a gross profit margin between 30% and 33%. Oclaro, Inc. (NASDAQ:OCLR) witnessed a marked increase in hedge fund support over the first quarter, with the number of investors in our database long its stock surging by 73.6% to 33. Among them was Alex Sacerdote’s Whale Rock Capital Management, with 7.83 million shares, valued at more than $42 million.

Sizmek Though Ceiling On Results, Buyout

Also on the rise on Wednesday is Sizmek Inc (NASDAQ:SZMK), which has gained more than 45% today, following posting the release of second-quarter results and the announcement that the company will be taken private. Before the opening bell, the company reported a net loss of $0.04, versus estimates of a loss of $0.14, while revenue of $48.9 million came in $4.1 million ahead of expectations. Moreover, the company announced it will be acquired by Vector Capital, a private equity firm with a focus on tech. Vector will purchase all of the Sizmek’s outstanding common stock for $3.90 per share in cash. Seven funds among those we track were long Sizmek Inc (NASDAQ:SZMK) at the end of the first quarter, including Jim Roumell’s Roumell Asset Management, which held 1.14 million shares.

Robust Results Help 3D Systems

Finally, there’s 3D Systems Corporation (NYSE:DDD), which is more than 20% in the green so far today on the back of the company reporting its second-quarter results. While revenue of $158.1 million missed the Street’s expectations by $2.91 million, EPS of $0.12 was significantly higher than the expected $0.06. The gross profit margin also rose by 3 percentage points year-over-year to 50.9%. CEO Vyomesh Joshi stated: “We were pleased with continued strong demand for our healthcare solutions and software as well as increased materials sales into advanced industrial and healthcare applications. We see clear opportunities for improvements in 3D printers and on demand manufacturing services as we drive operational excellence and focus on providing reliable end-to-end solutions.” Among the funds in our database, 12 held long positions in 3D Systems Corporation (NYSE:DDD) at the end of March. The largest stake was held by David E. Shaw’s D. E. Shaw, which owned more than 1.33 million shares valued at $20 million.

Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned above.