Why These Five Stocks Are Growing On Monday

All major U.S. stock indexes are trading down on Monday, on renewed fears of a global economic slowdown and a plummet in Chinese stocks. However, a few stocks, such as IAMGOLD Corp (USA) (NYSE:IAG), Barnes & Noble, Inc. (NYSE:BKS), American Capital Ltd. (NASDAQ:ACAS), Knowles Corp (NYSE:KN), and Stratasys, Ltd. (NASDAQ:SSYS) managed to retrieve some gains. So, let’s take a look at the events driving this growth and into the sentiment of the funds in our database.

At Insider Monkey, we track hedge funds’ moves in order to identify actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically underperformed the S&P 500 Total Return Index by an average of seven basis points per month between 1999 and 2012. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Index by an average of 95 basis points per month (read the details here). Since the official launch of our small-cap strategy in August 2012, it has performed just as predicted, returning over 102% and beating the market by more than 53 percentage points. We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise (while avoiding their high fees at the same time) rather than large-cap stocks.

Let’s start with IAMGOLD Corp (USA) (NYSE:IAG), which was up by about 8.8% on Monday afternoon. The stock, which lost 42.28% over 2015, started 2016 recuperating some of the lost ground as gold prices rose in Monday trading as concerns about a global economic slowdown and a tense situation in the Middle East injected uncertainty into investors around the globe.

As the stock declined during 2015, so did hedge fund interest. By the end of the third quarter of 2015, nine funds among those we track held long stakes in IAMGOLD Corp (USA) (NYSE:IAG), down from 16 a quarter earlier. However, those still betting on the company seem quite bullish. For instance, First Eagle Investment Management boosted its exposure by 22% to 8.04 million shares, while Jim Simons’ Renaissance Technologies upped its wage by 40% to over 5.27 million shares.

Barnes & Noble, Inc. (NYSE:BKS) is also up, by almost 5%, on Monday. In a recent article, Barron’s mentioned the stock among its income ideas for 2016. With a dividend of $0.15, Barnes & Noble’s stock sports a yield of around 6.52%, which makes the stock attractive for dividend investors.

Same as in the case cited above, hedge funds have been losing interest in Barnes & Noble, Inc. (NYSE:BKS) and the number of funds long the stock fell by almost 35% during the third quarter; among the funds we track, 23 disclosed long stakes in the company as of September 30. However, it seems like David Abrams’ Abrams Capital Management felt quite bullish on the stock; the fund boosted its exposure by 36% over the quarter, to 6.91 million shares, worth more than $83 million.

Another gainer on Monday afternoon was American Capital Ltd. (NASDAQ:ACAS), whose stock is up 2.67% after the company announced that over the fourth quarter of 2015 it had purchased approximately 20.7 million company shares, or 8% of the outstanding stock, in the open market for a total value of almost $300 million.

As of the end of the third quarter, 36 hedge funds among those we track disclosed long positions in the company – two less than in the previous quarter. Among them, Pine River Capital Management, managed by Brian Taylor held the largest stake, comprising 13.4 million shares, worth $163 million.

Next up is Knowles Corp (NYSE:KN), which has advanced by almost 5.5%. It seems like the surge was triggered by an upgrade by Craig Hallum, which issued a ‘Buy’ rating and $18 price target on the stock.

Knowles Corp (NYSE:KN) also saw the hedge fund interest fall over the third quarter of 2015. A total of 13 funds from our database disclosed long stakes in the company, down from 16 in the previous quarter. Interestingly, 9.6% of the company’s outstanding stock is held by these funds, with David Goel And Paul Ferri’s Matrix Capital Management being the largest shareholder, with 3.53 million shares – worth roughly $65 million.

Finally, there’s Stratasys, Ltd. (NASDAQ:SSYS), whose shares have gained approximately 4.4%, possibly driven by 3D Systems Corporation (NYSE:DDD)’s double-digit gains. On Saturday, Barron’s published an article, reiterating their bearish view on 3D Systems Corporation (NYSE:DDD), stating that the stock could fall as low as $3, citing weakness in demand for consumer 3-D printers, among other reasons.

Among the more than 730 hedge funds that we track, 17 held long stakes in Stratasys, Ltd. (NASDAQ:SSYS) as of the end of the third quarter of 2015. In this group, we should highlight Philippe Laffont’s Coatue Management, which last disclosed holding 4.05 million shares of the 3D printing company.

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