Why Were Investors Going Bonkers For These 4 Stocks On Monday?

In Monday trading news, TeleCommunication Systems Inc. (NASDAQ:TSYS), KaloBios Pharmaceuticals Inc. (NASDAQ:KBIO) and Peabody Energy Corp. (NYSE:BTU) all made big gains on heavy trading volumes following separate merger and sales agreements, while Mallinckrodt Public Ltd. Co. (NYSE:MNK) was sparking positive vibes after growing its net sales during the latest quarter. Let’s look deeper into today’s news as well as look at what the investors from our database think about these stocks.

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TeleCommunication Systems Inc. (NASDAQ:TSYS) rallied by 12.53% after striking an agreement that will see the company sell itself for approximately $430.8 million in enterprise value. Comtech Telecommunications Corp. (NASDAQ:CMTL), whose shares dropped by 6.31% on Monday, will acquire TeleCommunication Systems for $5 per share, expecting that the deal will be accretive during the first year as a combined company. The acquisition is expected to bring in approximately $8.0 million in the first year following the closing and $12.0 million in the second year, the companies said.

By the end of September, 12 funds out of the 730 in our database held 19.50% of the outstanding stock of TeleCommunication Systems. Top investor Becker Drapkin Management held 3.38 million shares of the company at the end of September, valued at $11.6 million.

Meanwhile, 11 funds in our database held 17.10% of Comtech’s outstanding stock on September 30. First Eagle Investment Management held 1.63 million shares of the company valued at $33.5 million.

KaloBios Pharmaceuticals Inc. (NASDAQ:KBIO) skyrocketed by another 116.44% after monster trading days on Thursday and Friday of last week that have seen its shares soar by over 1,800%. The biopharmaceutical company, which was in dire straits, sold 70% of its outstanding shares to an investor group led by Turing Pharmaceuticals AG Founder and CEO Martin Shkreli, who will also run KaloBios as its new CEO and Chairman of the Board. KaloBios received at least $3.0 million in equity backing from Shkreli and other investors on top of a $10 million facility for equity financing. The new CEO also expressed positivity regarding KaloBios’ lenzilumab, to treat rare and orphan diseases. “Lenzilumab has particular promise in Chronic Myelomonocytic Leukemia (CMML), a disease with no FDA-approved treatment options and a 3-year overall survival rate of 20%,” Shkreli said.

As of the end of September, Renaissance Technologies held 3.30% of the outstanding stock of KaloBios, valued at $259,000 at that time (now significantly more).

Peabody Energy Corp. (NYSE:BTU) jumped by 3.72% following a $358 million deal to sell its El Segundo and Lee Ranch mines in New Mexico and the Twentymile Mine in Colorado to Bowie Resource Partners LLC. Bowie, which will also assume approximately $105 million in related liabilities, will acquire the coal assets, which hold approximately 330 million tons of combined coal reserves. The same mines are expected to produce 11 million tons in 2016, according to Peabody projections. The deal may close before the end of the first quarter of 2016.

As of the end of September, 16 funds in our database held 15.10% of the company’s outstanding stock. Kopernik Global Investors, a firm focused on materials stocks, holds 15 million shares of the company.

Mallinckrodt Public Ltd. Co. (NYSE:MNK) gained 8.36% after reporting increased net sales, which were up by 31% in the fourth quarter of fiscal year 2015, to $882.4 million. The biopharmaceutical company reported net income of $75.2 million for the period, compared to a loss of $352.4 million for the same period last year. For the full fiscal year 2015, the company booked $3.35 billion in net sales, compared to $2.08 billion in the 2014 fiscal year.

“2015 was another pivotal year for Mallinckrodt. We were particularly pleased that fourth quarter and full year net sales were driven by volume growth,” Mallinckrodt President and CEO Mark Trudeau said. “Mallinckrodt’s successful ‘acquire to invest’ growth strategy differentiates us from other specialty pharmaceutical companies as we typically focus on acquiring highly durable, under-resourced therapies that offer effective treatment alternatives for small, underserved and poorly penetrated patient populations.”

40 funds in our database held $1.55 billion worth of Mallinckrodt shares on September 30. Paulson & Co. held 6.6 million shares of Mallinckrodt at that time.

Disclosure: None