Why Are Investors Piling Into These Surging Stocks Today?

This earnings season hasn’t been very eventful in terms of volatility. The S&P 500 is roughly flat, while the Dow Jones is up by a mere 27 points. While the broader indexes are quiet, five individual stocks, Synaptics, Incorporated (NASDAQ:SYNA), COPsync Inc (NASDAQ:COYN), DragonWave, Inc.(USA) (NASDAQ:DRWI), Nu Skin Enterprises, Inc. (NYSE:NUS), and ExOne Co (NASDAQ:XONE), are surging. Let’s analyze the factors causing these surges and see how the smart money is positioned in each stock.

Through extensive research that covered portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on can generate monthly returns nearly 1.0 percentage points above the market (see the details here).

Buyout Talks Continue for Synaptics

Synaptics, Incorporated (NASDAQ:SYNA) is 10.7% in the green this morning after Bloomberg reported that the company is still in ‘active discussions with a state-backed Chinese investment group’ that might value the company at around $110 per share. According to the article, Synaptics is pushing for a deal announcement by the end of April. There is no guarantee that the deal will come to fruition, however, or that it won’t be delayed at the very least. The number of elite funds in our database with holdings in Synaptics, Incorporated (NASDAQ:SYNA) fell by five during the fourth quarter to 13 as of the end of December.

Nano-cap Rallies on Agreement

COPsync Inc (NASDAQ:COYN) shares have surged by 18% this morning after the company announced a joint technology development agreement with LIFEWatch USA wherein the two will develop and commercialize a hand-held device tentatively named the COPsync Beacon, which could be used to remotely trigger a COPsync911 alert. COPsync CEO Ronald Woessner had this to say about the deal:

“We cannot think of a better company to work with than LIFEWatch USA for adding a remote device alert capability to the COPsync911 threat-alert system. In addition to combining our respective competencies, we expect the extensive LIFEWatch USA distribution channel will help us leverage our sales capabilities and expose the COPsync911 threat-alert system to a larger population of potential buyers. We look forward to working together with one of the most recognized American brands that have provided the medical alert services as seen on TV for the last 20 years.”

None of the funds tracked by Insider Monkey held shares of COPsync Inc (NASDAQ:COYN) as of December 31, according to SEC filings. As with all nano-cap stocks, investors should exercise due diligence before investing.

On the next page we examine why DragonWave Inc, Nu Skin Enterprises, and ExOne Co are all rising high today.

DragonWave Rises on Successful Trials 

Nano-cap DragonWave, Inc.(USA) (NASDAQ:DRWI), a global supplier of packet microwave radio systems, is 10% higher after the company successfully completed five customer trials of its newly launched Harmony Enhanced MC dual carrier product. DragonWave also has five additional trials of the product scheduled for the next three months. Earl Lum, President of EJL Wireless Research, a consulting and analytics firm said:

“Operators are finding that Harmony Enhanced MC can be easily deployed today to expand backhaul capacity on their overburdened networks, while offering them the capacity and functionality to support next-generation network builds. Harmony Enhanced MC provides a cost-effective solution today with added value capabilities to support backhaul demands for 5G.”

Two funds in our system owned $101,000 worth of DragonWave, Inc.(USA) (NASDAQ:DRWI)’s shares at the end of 2015.

Nu Skin Rallies as Technical Traders hit Buy

Nu Skin Enterprises, Inc. (NYSE:NUS) has surged by 3% today as technical traders buy. Shares of the anti-aging personal care products company have been on a strong uptrend since February and recently closed above their 200-day simple moving average. The company is expected to report its latest earnings results on the 28th of this month. 19 funds that we follow owned $111.81 million of Nu Skin Enterprises, Inc. (NYSE:NUS)’s shares, which accounted for 5.20% of the float on December 31. Those figure represented a steep decline from the 29 funds with $175.95 million in Nu Skin holdings on September 30. Cliff Asness‘ AQR Capital Management owned 527,107 Nu Skin shares as of the end of December.

An Analyst Turns Bullish on 3D; ExOne Gets  a Lift

ExOne Co (NASDAQ:XONE) shares are almost 6% in the green after Bank of America Merrill Lynch raised its rating on peer 3D Systems Corporation (NYSE:DDD) to ‘Buy’ from ‘Underperform’ and increased its price target on that stock to $26 from $11. Bank of America’s Wamsi Mohan thinks that 3D System’s new boss, Vyomesh Joshi, has the skill and the experience to turn around that company. The analyst raised his 2016 EPS estimate on 3D Systems to $0.30 from $0.28, and his 2017 EPS estimate to $0.57 from $0.39. Investors are hoping that 3D Systems’ better fortunes will also rub off on ExOne. Three funds tracked by Insider Monkey owned 0.8% of ExOne Co (NASDAQ:XONE)’s shares at the end of December.

Disclosure: None