Stocks Driving Tuesday’s Market Gains Include Sprint (S), Coach (COH), and Swift Transportation (SWFT)

The markets are recuperating on Tuesday, with all major U.S stock indexes trading up in the morning hours. Among the stocks driving the surges were SGOCO Group Ltd (NASDAQ:SGOC), Firstmerit Corp (NASDAQ:FMER), Swift Transportation Co (NYSE:SWFT), Sprint Corp (NYSE:S), and Coach Inc (NYSE:COH), all of which were up by double digits in the early afternoon. Let’s take a look into the events that prompted the spike in these stocks, and into what the funds in our database think about the companies.

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Back to the stocks that interest us, let’s start with the largest gainer – and smallest company, SGOCO Group Ltd (NASDAQ:SGOC). The nano-cap tech company performed a 1:4 reverse stock split on Monday, which led to the stock rising by 30.77% over the day. It seems like the market appreciates the stock consolidation, as today shares have continued to surge, gaining more than 32%. This equates to a two-day spike of more than 80%.

Also impacting positively on SGOCO Group Ltd (NASDAQ:SGOC)’s stock seems to be a new exclusive agreement that one of the company’s subsidiaries signed with Macau Jinyi Technology Co., Ltd., to develop and market its products in Macau, China.

Next up is Firstmerit Corp (NASDAQ:FMER), a small-cap U.S. bank holding company that is up by over 16.7% this afternoon. The firm released its quarterly financial results in the morning, however this was not the main element behind the marked ascent in its stock price. The primary driver behind this advance was the announcement of an agreement by which Huntington Bancshares Incorporated (NASDAQ:HBAN) will acquire the company for approximately $3.4 billion in cash and stock. Shareholders of the purchased bank will receive 1.72 shares of Huntington’s common stock and $5 in cash for each share of Firstmerit that they own.

Among the hedge funds that will soon become Huntington Bancshares Incorporated (NASDAQ:HBAN) shareholders, should they decide not to sell their stakes in Firstmerit Corp (NASDAQ:FMER) now that the stock is up by double digits, is Israel Englander’s Millennium Management. Over the third quarter, the firm more than tripled its position in Firstmerit, taking its holding to 713,404 shares, while disposing all of its 2.21 million shares of Huntington. Now it seems like the latter will see a big hedge fund backer return to the fold.

On the next page, we will take a look at the news driving the surges in the shares of Swift Transportation Co (NYSE:SWFT), Sprint Corp (NYSE:S), and Coach Inc (NYSE:COH).

Swift Transportation Co (NYSE:SWFT) is also trading up by more than 16% this afternoon. The small-cap company reported its fourth quarter financial results after the market closed on Monday, comfortably beating estimates on the earnings front, while delivering sales almost in-line with expectations. Earnings came in at $0.53 per share, versus the Street’s consensus estimate of $0.47 per share. Revenue of $1.09 billion fell only slightly short of expectations, which called for $1.11 billion in sales.

According to the company, the positive results were aided by “lower costs from fewer accidents and insurance claims, improved freight rates and fewer empty loads carried by the company’s drivers,” the Wall Street Journal reported.

Probably happy with Swift Transportation Co (NYSE:SWFT)’s results was Dmitry Balyasny’s Balyasny Asset Management, which disclosed on November 17 that it had boosted its stake in the company to more than 4.65 million shares, or almost 3.3% of the total shares, from just 548,054 shares held previously.

Another big gainer on Tuesday is Sprint Corp (NYSE:S), up by more than 20% in the afternoon hours, after surprising the Street with a smaller-than-expected quarterly loss and a raise in its earnings outlook. According to the management team, the results were helped by cost-cutting initiatives and a large increase in “postpaid” subscribers, the most lucrative for the company.

Sprint Corp (NYSE:S) really needed a boost. Between the beginning of the year and Monday evening, the stock had lost more than 30% as the company continued to struggle to turn around its business. Now, some of the Sprint bears, like William B. Gray’s Orbis Investment Management might be regretting having taken a pessimistic stance. The firm was the largest Sprint investor in our files as of the end of the second quarter of 2015; however, over the third quarter, it trimmed its position in the carrier by 89%, to 7.76 million shares.

Finally, there’s Coach Inc (NYSE:COH), which is up by roughly 11% today after beating analyst expectations with its financial results for the second quarter of fiscal year 2016, released before the market opened. “We drove further sequential improvement in our North America bricks and mortar business – led, as expected, by our retail stores, while our outlet store channel also strengthened against a backdrop of lower tourist traffic and a highly promotional environment,” CEO Victor Luis explained in a statement.

Jim Cramer characterized the results as a “game changer”, and this might have an impact on hedge fund sentiment going forward; institutional investors had not been particularly bullish on Coach Inc (NYSE:COH) recently. Over the third quarter of 2015, the number of hedge funds in our database long the retailer fell by 22.8% to 27. However, the good news might lead to a sentiment reversion.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned in this article.