Why Are These Stocks Seeing Green Today?

At a time when the major indexes are in bull market territory, shares of Electronic Arts Inc. (NASDAQ:EA), Alibaba Group Holding Ltd (NYSE:BABA), Netflix, Inc. (NASDAQ:NFLX), NVIDIA Corporation (NASDAQ:NVDA), and AEterna Zentaris Inc. (USA) (NASDAQ:AEZS) are also trading in the green. In the following article, we will examine why investors are buying and selling these stocks and also examine the latest hedge fund activity in them.

Hedge funds have been underperforming the market for a very long time. However, this was mainly because of the huge fees that hedge funds charge as well as the poor performance of their short books. Hedge funds’ long positions performed actually better than the market. Small-cap stocks, activist targets, and spin offs were among the bright spots in hedge funds’ portfolios (read the details here). This strategy also managed to beat the market by double digits annually in our back tests covering the 1999-2012 period.

Electronic Arts Inc. (NASDAQ:EA) shares are up by 1.5% today after the recent announcement of its online subscription service for some of its top PC games. In recent days, analysts at Bank of America also upgraded the company to ‘Buy’ from ‘Neutral’, slapping 20% upside potential on the stock. Electronic Arts Inc. (NASDAQ:EA) gained popularity among the investors that we track in the third quarter. 51 funds held shares of the company on September 30, up by four over the quarter, and they amassed 11.3% of the float. Among them, Stephen Mandel‘s Lone Pine Capital was the largest shareholder, reporting a position of 8.78 million shares in its latest 13F filing.

Moving on, Alibaba Group Holding Ltd (NYSE:BABA) shares are up by 0.52% today after the company opened a new store in a Free Trade Zone in North China, to boost sales of imported products into that country. Among the funds that we follow, 60 reported long positions in Alibaba Group Holding Ltd (NYSE:BABA) as of the end of September, down by 25 from a quarter earlier and they amassed 2.6% of the float. Among those funds from our database that were long the stock was Boykin Curry‘s Eagle Capital Management, with a stake of 8.1 million shares.

Next up, we’ve got Netflix, Inc. (NASDAQ:NFLX), shares of which have risen by over 2% on the day. The push comes ahead of the company reporting its financial results for the fourth quarter after the closing bell today. Analysts are expecting revenue of $1.83 billion and EPS of $0.02 for the quarter.

Hedge funds seem to like Netflix, Inc. (NASDAQ:NFLX). The stock gained popularity among the investors that we track in the third quarter, as 57 funds held shares of the company on September 30, up by seven funds over the quarter, and they amassed 14.9% of the float. Among them, Chase Coleman‘s Tiger Global Management was the largest shareholder, reporting ownership of 17.99 million shares in its latest 13F filing.

NVIDIA Corporation (NASDAQ:NVDA) is trading higher today on no particular news today, now up by just under 1%, giving back most of its gains from the morning session.

During the third quarter, NVIDIA Corporation (NASDAQ:NVDA) also enjoyed an increase in popularity among the funds we track, with 34 investors holding long positions at the end of September, versus 30 funds a quarter earlier. David Harding’s Winton Capital Management was the largest shareholder of NVIDIA Corporation (NASDAQ:NVDA), holding 3.36 million shares valued at $82 million at the end of September.

Finally, among the big gainers today is AEterna Zentaris Inc. (USA) (NASDAQ:AEZS). Shares of the retailer are 16% in the green after reporting a new phase 3 study to evaluate the efficacy of Macrilen (macimorelin), a product which could be used for assessing growth hormone deficiency in adults. The company believes that the study complies with the European Medicines Agency (“EMA”) and FDA requirements to be marketed in the future in Europe and the U.S.

“On January 16, we held an Investigators’ Meeting for our multi-center confirmatory Phase 3 clinical trial of Macrilen™. The purpose of the meeting was to review Macrilen™ with the investigators, as well as the clinical trial protocol. The 77 investigators and site personnel who attended the meeting included Jose Manuel Garcia, MD, PhD, Associate Professor of Medicine at University of Washington School of Medicine, Seattle, who is serving as coordinating investigator. Dr. Garcia expressed his commitment to the development of Macrilen™ because of the medical need for such a convenient test in the absence of an FDA-approved diagnostic test for AGHD,” said Dr. Richard Sachse, the Company’s Chief Scientific Officer.

Much like NVIDIA Corporation (NASDAQ:NVDA), hedge funds have become increasingly bullish on AEterna Zentaris Inc. (USA) (NASDAQ:AEZS), with the number of firms betting on it having doubled during the third quarter of 2015, to four. Jim Simons’ Renaissance Technologies holds the largest stake among those, comprising 11.28 million shares.

Disclosure: None