Why Fifth Street Finance, Nutanix, and Dominion Diamond Jumped Today
The stock market was strong on Friday, and the Dow Jones Industrials and S&P 500 both closed at record high levels. Major benchmarks finished higher by roughly 0.5% to 0.75% as investors felt more upbeat about the economy as a whole. Even though bank stocks fell after major financial institutions reported second-quarter results that didn't quite live up to investors' hopes, gains in technology, healthcare, and energy reflected greater enthusiasm about their future prospects. In addition, company-specific news helped lift stocks throughout the market, and Fifth Street Finance (NASDAQ: FSC), Nutanix (NASDAQ: NTNX), and Dominion Diamond (NYSE: DDC) were among the best performers on the day. Below, we'll look more closely at these stocks to tell you why they did so well.
Shares of Fifth Street Finance climbed over 16% after the business development company had its management replaced by a new investment advisor. Oaktree Capital Group (NYSE: OAK) will assume management responsibilities over Fifth Street Finance and another related business development company, paying $320 million in cash to current manager Fifth Street Management LLC. Once the deal is complete, Fifth Street Finance shareholders will enjoy reductions in the management fees they pay, including drops in the annual management fee from 1.75% to 1.5% and in the incentive fee from 20% to 17.5%. The deal still needs approval, but the companies hope that they can consummate the agreement by the fourth quarter. Investors are excited by Oaktree's reputation as a highly respected manager, believing Oaktree could help Fifth Street shares trade at a much narrower discount than they have under current management.
Image source: Nutanix.
Source: Fool.com
