In the extended trading hours, one healthcare and one industrials stock registered significant gains on the back of positive news and extended their growth in the first trading hours on Thursday. Aerie Pharmaceuticals Inc (NASDAQ:AERI)‘s stock almost doubled, jumping by 93% during after-hours, after the company announced positive results from its second Phase 3 trial of Rhopressa, a drug developed for the treatment of glaucoma, which represents the company’s lead product candidate. The second stock, Herman Miller, Inc. (NASDAQ:MLHR), surged by over 11% amid the company’s financial report for the first quarter of fiscal 2016, which showed a solid earnings growth and included an outlook above the estimates. In this article we will not only take a closer look at the developments behind the growth of both stocks, but will also assess whether the hedge fund sentiment suggests that these companies represent profitable investment opportunities for the long-run.
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Aerie Pharmaceuticals Inc (NASDAQ:AERI)‘s stock opened sharply higher, by 83%, which managed to offset the slump in April, after its first Phase 3 trial failed to meet its endpoint. The US Food and Drug Administration has allowed the company to change the primary endpoint for the second trial. The second trial of Rhopressa, which represents eye drops that target the diseased tissue that causes elevated intraocular pressure that leads to glaucoma, showed noninferiority compared to timolol, a glaucoma therapy that is currently present on the market. Meanwhile, despite the fail in April, most hedge funds invested in Aerie Pharmaceuticals Inc (NASDAQ:AERI) chose to stay put in the company, betting that the further tests would be more successful. In this way, at the end of June, 18 investors from our database reported holding $103.29 million worth of stock, up from $101.27 million held by 21 investors a quarter earlier. Moreover, as the stock dropped by over 40% between April and June, these funds amassed around 23% of the company in their equity portfolios. Among them, the top three shareholders of Aerie Pharmaceuticals Inc (NASDAQ:AERI) boosted their positions considerably. James Flynn’s Deerfield Management surged his stake by almost a threefold to 2.21 million shares, while Christopher Medlock James’ Partner Fund Management and Donald Chiboucis reported holdings of 1.85 million shares and 364,400 shares, up by 690% and 570% on the quarter respectively.
Herman Miller, Inc. (NASDAQ:MLHR)‘s stock opened over 5% higher on Thursday after the company said that its net sales went up by almost 11% on the year to $565.4 million at the end of August. Its earnings per share surged to $0.56 per share from $0.42 a year earlier. Its adjusted earnings came in at $0.47 per share. Herman Miller, which designs and sells office furniture, also said it expects sales between $570 million and $590 million for the current quarter, which would imply a 5% annual growth. The company also expects EPS in the range of $0.52 and $0.56, which is above the current analyst estimates. Among the funds from our database, Herman Miller, Inc. (NASDAQ:MLHR) also lost some fans during the second quarter, but the overall sentiment is bleak. Between April and June, the number of funds with long positions in the company fell by three to 18, while the aggregate value of their positions went up to $82.82 million from $72.87 million a quarter earlier, fueled by a 5% growth of the stock. However, at the end of the second quarter these investors held less than 5% of Herman Miller, Inc. (NASDAQ:MLHR)’s outstanding stock. More specifically, Robert Polak’s Anchor Bolt Capital upped its stake by 93% on the quarter to around 599,800 shares, followed by Chuck Royce’s Royce & Associates, which disclosed holding 371,000 shares and Sahm Adrangi’s Kerrisdale Capital, which initiated a stake with 366,800 shares.
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