Why Best Buy, Celgene, and Three Other Stocks Are Making Headlines Today

All three index futures are in the green as traders await the Fed’s upcoming interest rate decision later today. If rates remain low, the U.S. and global economy have a chance to grow faster than the recent dour expectations set by analysts. Among the stocks trending amid the ‘wait-and-see’ environment are Best Buy Co Inc (NYSE:BBY), Celgene Corporation (NASDAQ:CELG), Kamada Ltd (NASDAQ:KMDA), Shire PLC (ADR) (NASDAQ:SHPG), and Carbylan Therapeutics Inc (NASDAQ:CBYL). Let’s find out why each stock is in the spotlight and see how hedge funds and other investors we track are positioned towards 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).

Analysts Give the Thumbs Down to Best Buy 

Best Buy Co Inc (NYSE:BBY)’s stock opened lower by has regained the losses since the opening bell and is currently slightly in green after analysts at Credit Suisse downgraded the stock to ‘Neutral’ from ‘Outperform’ and trimmed their price target to $31 from $36.5 per share.The analysts worry that Best Buy’s same-store sales could slide into negative territory in the second half of the year as the company faces, ‘ a more difficult battle between controllable vs. uncontrollable factors this year’. Among the funds we track, 28 funds had long positions in Best Buy Co Inc (NYSE:BBY), as of the end of March.

More Buybacks at Celgene 

Celgene Corporation (NASDAQ:CELG)’s stock has inched up after the company’s board of directors authorized a buyback program, worth an additional $3 billion effective immediately. The additional buyback authorization brings the total buyback authorization to $5.3 billion, or 6.7% of Celgene’s float at current prices. A total of 61 hedge funds and other institutional investors tracked by Insider Monkey are bullish on Celgene Corporation (NASDAQ:CELG) as of the end of March, down by three funds from the previous quarter.

On the next page, we examine Kamada, Shire, and Carbylan Therapeutics.

The FDA Delivers Good News 

Kamada Ltd (NASDAQ:KMDA) and Shire PLC (ADR) (NASDAQ:SHPG) are trending today after the United States Food and Drug Administration approved an expanded label for GLASSIA, an Alpha-1 Proteinase Inhibitor in humans, marking the first drug treatment for adults with emphysema due to severe Alpha-1 Antitrypsin deficiency that can be self-infused at personal homes given appropriate training. An estimated 100,000 people in the United States have Alpha-1 Antitrypsin deficiency, although fewer than 10% with the deficiency have been diagnosed. In 2010, Kamada and Baxalta entered into an exclusive strategic cooperation agreement for the distribution and licensing of GLASSIA, where Baxalta would be the exclusive distributor of GLASSIA in the United States, Canada, Australia, and New Zealand.  Recently, Shire has acquired Baxalta. The FDA’s ruling is good news for people who have trouble traveling to healthcare facilities to receive the drug infusion. Of the 766 elite funds we track, two funds owned $3.47 million worth of Kamada Ltd (NASDAQ:KMDA)’s stock and 49 funds held shares of Shire PLC (ADR) (NASDAQ:SHPG) at the end of March. As with all nano-caps and micro-caps, investors should do due-diligence before buying or selling.

Carbylan Rises on Merger Agreement

Carbylan Therapeutics Inc (NASDAQ:CBYL) opened higher but has plunged in the first hours of trading after the biotech agreed to merge with KalVista Pharmaceuticals. Once the merger is complete, KalVista shareholders will become majority owners of the combined company (with approximately 81% ownership) and Carbylan will be renamed KalVista Pharmaceuticals, Inc. The deal is expected to close in the third or fourth quarter of 2016. Anand Parekh’s Alyeska Investment Group is one of the few funds tracked by us that owns shares of Carbylan, having reported 151,688 shares in its latest 13F filing.

Disclosure: none