Why Shares of Paragon, Newell, Seadrill, Pandora and Genworth Are Soaring Today

While it is true that a few tech companies surprised investors, most of the largest ones posted disappointing quarterly results this week and for this earnings period in general. Driven by declining tech (and healthcare) stocks, the U.S market is in the red on Friday afternoon, on a day where oil also fell and European and Asian markets delivered even heftier losses. Following today’s drops, the S&P and Dow are poised to close the month not with a bang, but with a whimper, at nearly the same levels where they started it, while the Nasdaq will have lost more than 2%. However, a few stocks are moving up heartily today. Among them we can count Newell Brands Inc (NYSE:NWL), Genworth Financial Inc (NYSE:GNW), Seadrill Ltd (NYSE:SDRL), Paragon Shipping Inc. (NASDAQ:PRGN), and Pandora Media Inc (NYSE:P). We’ll uncover why these stocks are being lifted higher today and see what the hedge funds in our database think about each of these companies.

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Sharpie Maker Up Sharply After Strong Earnings

Let’s start with Newell Brands Inc (NYSE:NWL), which is up by roughly 4.8% on Friday afternoon following the announcement of the company’s first quarter financial results. Before the market opened this morning, the firm that makes Sharpies, Parker pens, and Rubbermaid products, among others, posted EPS of $0.40, beating the Street’s consensus estimate by $0.03. While revenue was up by 4.8% year-over-year, to $1.32 billion, it did miss estimates by $130 million. However, investors do not seem very worried about revenue, as EPS rose by 11.1% year-over-year, driven by core sales growth in all five of the company’s business segments, expanding operating margins, and a smaller float.

Among the funds that we track, 28 held long stakes in Newell Brands Inc (NYSE:NWL) as of the end of 2015. In this group, we could highlight Ken Griffin’s Citadel Investment Group, which declared owning 5.18 million shares of the company as of December 31.

Genworth Posts its Largest Gain in 6 Years

An even larger gainer in Friday trading is Genworth Financial Inc (NYSE:GNW), which has risen by almost 16% since the bell rang this morning on the back of the announcement of its strong first quarter performance. After the market closed on Thursday, the company reported adjusted EPS of $0.21 per share for the quarter, $0.07 above the Street’s consensus. And, even though revenue of $1.785 billion fell well short of expectations of $2.175 billion, investors seemed satisfied with the operating profit and the fact that CEO Tom McInerney is working to free up capital to meet the company’s debt payments.

Genworth Financial Inc (NYSE:GNW) also counted 28 hedge fund supporters from among those in our database at the end of 2015. Quite recently, Himanshu H. Shah’s Shah Capital Management reported ownership of 4.69 million shares of the company as of March 31 after boosting its holding of the stock by 50% during the first quarter.

Three more big gainers, Pandora among them, are discussed on the following page.

This Troubled Driller Just Restructured its Debt

Shares of Seadrill Ltd (NYSE:SDRL) are up by more than 8% in Friday trading after the offshore driller with the largest debt load in its industry announced that it had reached an agreement with its banks to extend three borrowing facilities. This is just the “first phase of a broader plan to refinance and recapitalize the business,” the company explained in a press release. “By deferring our imminent borrowing maturities, resetting a number of covenants and removing the risk of facility prepayments related to declining rig values we have established a more stable platform to pursue and conclude negotiations with our stakeholders,” CFO Mark Morris said in the statement.

As of the end of 2015, Seadrill Ltd (NYSE:SDRL) was in the portfolios of 21 hedge funds in our database, including that of Peter Rathjens, Bruce Clarke and John Campbell‘s Arrowstreet Capital, which declared holding 4.98 million shares of the company as of December 31 after nearly doubling its holding during the fourth quarter.

Paragon Now 9-Times More Expensive than on Wednesday

Next up is Paragon Shipping Inc. (NASDAQ:PRGN), a troubled Greece-based nano-cap shipping transportation services provider, which is up by more than 54% today. As impressive as today’s move is, it pales in comparison to the move that took place on Thursday, when the stock gained 573.34%. The gains posted over the course of the past two days now amount to a monumental 938%. So, what’s the deal?

Well, Paragon Shipping Inc. (NASDAQ:PRGN)’s stock had hit a record low of $0.26 on Wednesday, after losing 92.55% of its value between March 3 and last Wednesday. The huge decline followed a 1-for-38 reverse stock split, effective March 1, which exacerbated previous reports that the company was filing for bankruptcy. However, on Thursday, the company’s management said that it had filed a lawsuit against the news site TradeWinds and its reporter Joe Brady Stamford for defamation damages, arguing that the website and its author’s claims about the company’s imminent and Board-approved bankruptcy were “totally untrue”.

Separately, the company announced that it has reached an agreement to delay the deliveries of three drybulk carriers, and that it would not be able to meet upcoming interest payments due on some senior notes “due to a lack of liquidity”. Three funds in our database were long Paragon Shipping at the end of 2015.

Pandora’s Revenue and Guidance Surprises Investors

Finally, we’ve got Pandora Media Inc (NYSE:P), which is up by 5.5% on Friday afternoon after the announcement of the company’s first quarter financial results. On Thursday afternoon, the music streaming services provider posted a net loss of $0.20 per share on revenue of $297.31 million, beating the Street’s consensus estimate of a loss of $0.29 per share on revenue of $285.52 million. The firm also boosted its full-year guidance, helping the stock surge even higher. Management now expects revenue of $1.41 billion-to-$1.43 billion in 2016, up from a previous projection of $1.40 billion-to-$1.42 billion, and hitting expectations of $1.41 billion on the low end of the company’s guidance range. Furthermore, the company anticipates an EBITDA loss of $50 million-to-$70 million for the full 2016 year, down from a previous forecast of a $60 million-to-$80 million loss, and now fully below the consensus estimate of a loss of $71 million.

Pandora Media Inc (NYSE:P) has gained traction in the hedge fund world recently. Over the fourth quarter of 2015, the number of funds in our database long the stock rose by 33% to 48. These firms held more than 35% of the company’s total shares. The largest stake was held by Ricky Sandler’s Eminence Capital, which declared owning 10.73 million shares of the company as of December 31.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned in this article.