Why Are These Five Stocks In Spotlight on Monday?

Although the S&P 500 is up just 0.3% and the NASDAQ is up 0.5%, shares of five companies, J C Penney Company Inc (NYSE:JCP), Freeport-McMoRan Inc (NYSE:FCX), LendingClub Corp (NYSE:LC), MGT Capital Investments Inc. (NYSEMKT:MGT), and Globalstar, Inc. (NYSEMKT:GSAT), opened up substantially higher before moving in separate directions. In this article, we find out why traders have been buying and take a look at how smart money investors have been trading them.

While there are many metrics that investors can assess in the investment process, the hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor to beat the S&P 500 by around 95 basis points per month (see the details here).

Analyst Weigh in on J C Penney Company After Earnings

J C Penney Company Inc (NYSE:JCP) shares opened up higher today after the analysts at Robert W. Baird upgraded the stock to ‘Outperform’ from ‘Neutral’. The analysts like J C Penney’s risk reward profile and think the stock could ultimately go to $12 a share. Meanwhile the analysts at Citigroup went the other way and lowered their price target to $8 per share from $9 per share. The analysts at Morgan Stanley were even more bearish, and lowered their price target by $0.50 to $7.50 per share. Although J C Penney Company Inc (NYSE:JCP) reported disappointing earnings on Friday, some investors believe the company can successfully turn itself around. A total of 27 funds that Insider Monkey tracks owned shares of J C Penney at the end of December.

Analysts Give the Thumbs Up to Freeport-McMoRan

Freeport-McMoRan Inc (NYSE:FCX) is trading 8% higher after analysts at Cowen raised their price target to $15 per share from $10 per share. The analysts maintained their ‘Outperform’ rating and believe the company’s strong collection of copper assets and cost cutting will provide meaningful upside. Also helping Freeport-McMoRan Inc (NYSE:FCX) shares today is the fact that WTI crude prices are 3% higher and near $48 per barrel. Carl Icahn’s Icahn Capital LP owned 104 million shares of Freeport at the end of 2015.

On the next page, we will examine the latest events that put LendingClub, MGT Capital Investments, and Globalstar in the spotlight today.

LendingClub Surges on Technical Buying

LendingClub Corp (NYSE:LC)‘s relief rally has officially come as shares of the beleaguered peer-to-peer lender is up 8.5% in morning trading after the stock fell sharply over the previous few sessions due to its CEO resigning. The bears have attacked LendingClub Corp (NYSE:LC) over the past quarter because the company has underperformed in terms of quarterly results and investors have questioned the sustainability of LendingClub’s capital sources in times of economic volatility. Nevertheless, Lending Club does have a lot of potential and the stock is trading much closer to book value than before. Overall, 18 elite funds owned shares of LendingClub at the end of the fourth quarter of 2015.

Nano-Cap Rockets On Speculative Buying

MGT Capital Investments Inc. (NYSEMKT:MGT) has done a major pivot and speculative traders have sent the stock 19% in the green so far today. It was recently announced that eccentric software security pioneer John McAfee will be the new CEO of MGT Capital, which previously was an investor mobile games and fantasy sports. MGT Capital will change its name to John McAfee Global Technologies and will focus more on the security market. MGT has acquired some assets from McAfee’s D-Vasive to facilitate the transition. Two funds that we track amassed $66,000 of MGT Capital Investments Inc. (NYSEMKT:MGT) at the end of 2015. As with all nano-caps, investors should do their due diligence before making an investment decision.

Globalstar Surges 

Globalstar, Inc. (NYSEMKT:GSAT)’s stock is trading 17% higher after the FCC chairman’s office notified the company that it is recommending the approval of Globalstar’s spectrum for Wi-Fi use. The full FCC commission still needs to approve the decision however. Of the 786 elite funds we track, 13 funds owned $149.07 million of Globalstar, Inc. (NYSEMKT:GSAT), which accounted for 10.00% of the float at the beginning of 2016.

Disclosure: none