Why These 5 Stocks Have Spiked Today: What You Need to Know

Oil is up by more than 5% on Wednesday, and the markets are accompanying its surge, with all major U.S stock indexes trading up in early afternoon trading. Among the stocks posting the most significant gains we can count DragonWave, Inc.(USA) (NASDAQ:DRWI), Momo Inc (ADR) (NASDAQ:MOMO), Primerica, Inc. (NYSE:PRI), Acuity Brands, Inc. (NYSE:AYI), and Global Payments Inc (NYSE:GPN). Let’s take a look into the events that have pushed these stocks higher and see what the funds in our database think about the companies in question.

Our research determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor beat the S&P 500 by around 95 basis points per month (see more details here).

Let’s start with DragonWave, Inc.(USA) (NASDAQ:DRWI), a nano-cap, high-capacity packet microwave solutions provider that is trading up by more than 5% on Wednesday afternoon. The surge looks like a continuation of the 46.96% rise seen on Tuesday and the monstrous 317% spike witnessed since March 28, which was driven by the launch of its Harmony Care services offering, which will provide legacy support to the company’s installed base of more than 400,000 units. This product will allow customers to “extend the lifecycle of their installed microwave base products.”

As with most nano-caps, DragonWave, Inc.(USA) (NASDAQ:DRWI) does not count the support of many hedge funds. In fact, only two firms among those we track were long the stock at the end of 2015. Among them was Jim Simons’ Renaissance Technologies, one of the largest shareholders of record, which last held $89,000 worth of the company’s stock on December 31.

Next up is Momo Inc (ADR) (NASDAQ:MOMO), which has gained almost 34% since the bell rang this morning, registering its largest surge since its December 2014 IPO. Earlier today, a 13D filing revealed that Alibaba Group Holding Ltd (NYSE:BABA)’s finance affiliates have joined the group that is trying to buy out the social networking platform. Henry Guo, an analyst at Investment Technology Group, told Bloomberg that “Today’s announcement renewed hopes of Momo’s privatization… With Alibaba on board it shows that money is no longer a problem.”

Momo Inc (ADR) (NASDAQ:MOMO) counts a few more institutional supporters than DragonWave. Nine funds in our database were long the stock at the end of the fourth quarter, with their combined stakes accounting for more than 14.5% of the company’s total shares. The largest position among those investors was held by Lei Zhang‘s Hillhouse Capital Management, consisting of 4.88 million shares valued at $78.2 million.

We’ll uncover the reasons why three other stocks are making huge moves today on the next page.

Shares of Primerica, Inc. (NYSE:PRI) are trading up by more than 8.3% this afternoon, along with numerous other money management firms that service individuals, after the U.S Labor Department’s new standards to protect savers from conflicted investment advice were announced. The weaker than expected rules “will probably preserve more of the profits of the wealth management firms than expected,” Morningstar’s Michael Wong stated. Other stocks on the rise include LPL Financial Holdings Inc (NASDAQ:LPLA), Ameriprise Financial, Inc. (NYSE:AMP), and Charles Schwab Corp (NYSE:SCHW).

Primerica, Inc. (NYSE:PRI) counts even more hedge fund supporters than the stocks mentioned on the previous page. 18 funds among those we track were long the stock at the end of the fourth quarter, and held more than 10% of the company’s float. A noteworthy position was that of Glenn Greenberg’s Brave Warrior Capital, which held ownership of 2.96 million shares of the company.

Also on the rise in Wednesday trading is Acuity Brands, Inc. (NYSE:AYI), which is up by more than 10.5% after it announced its second quarter financial results for fiscal year 2016. Earnings of $1.80 per share beat estimates by $0.29, while revenue of $777.8 million, up by 26.2% year-over-year, came in $25.54 million above the Street’s consensus estimate. Looking forward, CEO Vernon Nagel said, “Third-party forecasts as well as key leading indicators suggest that the growth rate for the North American lighting market…will be in the mid-to-upper single digit range for fiscal 2016 with expectations that overall demand in our end markets will continue to experience solid growth over the next several years.”

Among the funds that we track, 31 held long positions in Acuity Brands, Inc. (NYSE:AYI) at the end of the fourth quarter, though their combined stakes accounted for only 3.1% of the company’s shares. The largest of those stakes was held by Ken Heebner’s Capital Growth Management, which held 265,000 shares of the company valued at more than $61 million on December 31.

Finally, there’s Global Payments Inc (NYSE:GPN), which is trading up by roughly 8.75% this afternoon, driven by the announcement of the company’s third quarter financial results for fiscal year 2016. Earnings of $0.70 per share came in $0.03 ahead of estimates, while $496.97 million in revenue also topped estimates, by $3.1 million. In addition, management declared a $0.01 per share quarterly dividend payment, in-line with the previously stated dividend.

Global Payments Inc (NYSE:GPN) counted the support of 28 hedge funds in our database as of the end of the fourth quarter. Among them was, once again, Renaissance Technologies, which held 1.15 million shares of the company, as well as Panayotis Takis Sparaggis’ Alkeon Capital Management, which opened a new stake comprised of 825,000 shares during the quarter.

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