Here’s Why These Five Stocks Are on the Move Today

While the broader indexes are trading close to flat, a number of stocks are showing considerably more volatility than the broader market.

Therefore, in this article we will discuss Pandora Media Inc (NYSE:P), Trinity Biotech plc (ADR) (NASDAQ:TRIB), Seadrill Ltd (NYSE:SDRL), and Aralez Pharmaceuticals Inc (NASDAQ:ARLZ), as well as another stock in the spotlight, salesforce.com, inc. (NYSE:CRM).  In addition, we will assess the hedge fund sentiment towards each stock.

Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. 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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Pandora Media Inc (NYSE:P) is 5% in the green after Goldman Sachs analyst Heath Terry hiked his target on the internet radio streamer to $19 from $17 and added the stock to the ‘Conviction Buy’ list (versus the previous ‘Buy’ rating). Terry thinks competition will slow as current competitors focus on making money rather than grabbing market share. There is also a possibility that Pandora’s subscriptions could surprise to the upside. Julian Robertson‘s Tiger Management initiated a new stake of over 1.46 million shares in Pandora Media Inc (NYSE:P) during the second quarter.

Trinity Biotech plc (ADR) (NASDAQ:TRIB) shares have almost halved after the company announced the withdrawal of its 510(k) premarket notification submission for the Meritas Troponin-I Test and Meritas Point-of-Care Analyzer. Apparently, the FDA asked Trinity on September 29 to consider withdrawing their submission due to various concerns, mainly related to the device’s operating temperature range and that the Troponin-I clinical performance is not consistent with the clinical performance data presented by the most recently cleared laboratory Troponin device. On the back of the news, management plans to cut expenditure levels to $1.5 million a year from the current rate of around $9 million a year. The company will also recognize a non-cash write-off in excess of $50 million. Of the around 749 elite funds we track, 13 funds held $50.32 million worth of Trinity Biotech plc (ADR) (NASDAQ:TRIB)’s stock, which accounted for 18.60% of the float on June 30, versus 15 funds and $49.59 million, respectively, at the end of March.

On the next page, we take a closer look at Seadrill Ltd, Aralez Pharmaceuticals, and salesforce.com.

Seadrill Ltd (NYSE:SDRL) has surged by 26% on surprise news that the company’s billionaire chairman, John Fredriksen, is said to be amenable to loan Seadrill $800 million to $1.2 billion as part of a larger deal with various financial institutions to restructure the offshore driller’s considerable debt burden. Seadrill had around $9.1 billion in net interest-bearing debt at the end of the second quarter, and considerable maturities over the next two years. The restructuring could postpone Seadrill’s bank maturities until 2020 or later. Although the deal would relieve considerable pressure from the offshore driller, some analysts still expect Seadrill to need to raise an additional $1 billion in equity by the beginning of 2019. That means potential dilution in the future. Among the funds we track, 17 funds owned shares of Seadrill Ltd (NYSE:SDRL) at the end of the second quarter, down by five funds from the previous quarter.

Aralez Pharmaceuticals Inc (NASDAQ:ARLZ) has rallied 5% after its subsidiary entered into an agreement with AstraZeneca plc (ADR) (NYSE:AZN) for the U.S. rights to Toprol-XL and its authorized generic. According to the terms, Aralez will make an initial upfront payment of $175 million, and also mid-teen percentage royalties and up to $48 million of potential milestone payments. Traders are hitting the buy button today because the transaction is expected to be immediately EBITDA accretive on an adjusted basis once it closes (analyst expect closing to occur in the fourth quarter of 2016). A total of 20 funds from our database had a bullish position in Aralez Pharmaceuticals Inc (NASDAQ:ARLZ) at the end of June. Together those funds held around 30.90% of the float.

Last but not least, salesforce.com, inc. (NYSE:CRM) is in the spotlight after the company disclosed that it bought the leading data management platform Krux for $340 million in cash and an estimated 3.4 million to 6.0 million shares. The deal is expected to close in the fourth fiscal quarter ending January 31, 2017. Eashwar Krishnan‘s Tybourne Capital Management raised its stake in salesforce.com, inc. (NYSE:CRM) by 141% to just over 3.36 million shares during the second quarter.

Disclosure: none