Why Traders Are Buzzing About Qualcomm, NXP, Alkermes, Cerecor, and More

Although the earnings reports from various tech giants have grabbed most of the attention today, several other companies are also trending.

In this article, we’ll examine the associated reasons why QUALCOMM, Inc. (NASDAQ:QCOM), NXP Semiconductors NV (NASDAQ:NXPI), DXP Enterprises Inc (NASDAQ:DXPE), Alkermes Plc (NASDAQ:ALKS), and Cerecor Inc (NASDAQ:CERC) are among the stocks in the spotlight this morning. We’ll also dig into 13F filings to determine hedge fund sentiment towards each stock.

Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see the details).

Joao Virissimo/Shutterstock.com

According to Bloomberg, QUALCOMM, Inc. (NASDAQ:QCOM)‘s potential purchase of NXP Semiconductors NV (NASDAQ:NXPI) is moving closer to the finish line. According to the article’s sources, the two parties are said to be in the final stages of talks and a deal could be announced as early as next week, though of course, there is also no guarantee that a deal will go through. The purchase price for NXP is said to be between $110 and $120 per share and the deal will likely be all-cash.

Of the two companies, the smart money liked NXP Semiconductors NV (NASDAQ:NXPI) more, despite it being far smaller than QUALCOMM, as 57 funds in our system were long NXP at the end of June, compared to 48 funds long QUALCOMM, Inc. (NASDAQ:QCOM).

A day after falling by 17% due to weak preliminary results, DXP Enterprises Inc (NASDAQ:DXPE) shares are down again in extended market trading after it announced the commencement of a primary public offering of 2.7 million shares of common stock. The company intends to use the proceeds of the offering to pay down its outstanding credit facility borrowings. DXP also intends to grant the underwriters of the offering a 30-day option to buy up to an additional 405,000 shares. Jim Simons‘ Renaissance Technologies cut its stake in DXP Enterprises Inc (NASDAQ:DXPE) by 10% in the second quarter to 269,400 shares at the end of June.

On the next page we’ll examine why Alkermes and Cerecor are surging.

Alkermes Plc (NASDAQ:ALKS) shares have surged by over 40% in extended market trading after the company announced positive topline results from a phase 3 study of ALKS 5461 for major depressive disorder. According to the study, once-daily ALKS 5461 substantially improved depression scores in patients with inadequate response to standard therapies for depression. The study met its primary endpoint of reducing the symptoms of depression in patients with major depressive disorder in a statistically meaningful way when compared to placebo. Alkermes intends to request a meeting with the FDA to discuss the next steps on the path to potential regulatory submission. Investors are excited because the treatment of major depressive disorder is a big market, one expected to reach $5.8 billion in value by 2025 according to consulting firm GlobalData. 25 funds in our database had a long position in Alkermes Plc (NASDAQ:ALKS) at the end of the second quarter.

Riding on the coattails of Alkermes’s positive phase 3 data of ALKS 5461 is Cerecor Inc (NASDAQ:CERC), which is 56% higher thanks to the company’s lead product candidate, CERC-301, also being a potential treatment of major depressive disorder. CERC-301 is a NR2B specific NMDA antagonist and is currently in phase 2 trials, while Alkermes’ ALKS 5461 is a Mu receptor partial agonist/kappa receptor antagonist. Of the 749 hedge funds that we track which filed 13Fs for the June quarter, three owned a total of $722,000 worth of Cerecor Inc (NASDAQ:CERC) shares on June 30.

Disclosure: None