Alibaba Group Holding Ltd (BABA) & Chemours Co (CC) Among Stocks that Just Hit 52-Week Highs

While the S&P 500 and Dow Jones have each retraced due to traders positioning for the upcoming FOMC meeting, some big name stocks have shown strong relative strength and have recently hit 52 week highs.

In this article, we take a closer look at five of them, Alibaba Group Holding Ltd (NYSE:BABA), Chemours Co (NYSE:CC), Cirrus Logic, Inc. (NASDAQ:CRUS), Las Vegas Sands Corp. (NYSE:LVS), and MGM Resorts International (NYSE:MGM) and we use the latest 13F data to see how hedge funds were positioned in each in the second quarter.

Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. 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 here).

Alibaba Group Holding Ltd (NYSE:BABA) shares advanced by over 5% in the week ended September 16, beating many of its large-cap peers in terms of performance and even outpacing the S&P 500, which inched up by around 0.5%. Although China’s economy is still sluggish, Alibaba’s growth has come back, with the company reporting a 59% year-over-year sales growth for its second quarter. Analysts think there is more upside. They have a $108.57 per share price target, and that number will likely move higher if Alibaba shares continue to outperform. Andreas Halvorsen‘s Viking Global nearly tripled its stake in Alibaba Group Holding Ltd (NYSE:BABA) to over 4.0 million shares at the end of June.

Chemours Co (NYSE:CC) continued its yearly advance this week, rising 13.7% to hit a 52-week high of $14.60 per share on Friday. Year-to-date, the stock has been one of the best performers on any index, surging by 174%. Driving gains recently is the company’s announcement that its management has achieved cost reductions of around $100 million in the first half of 2016. There is more efficiency to come, as management anticipates $200 million in cost reductions in 2016 and an additional $150 million in 2017. Overall, the management believes the company is well underway to enhance adjusted EBITDA by $500 million, to improve free cash flow and to reduce leverage to 3x in 2017. The number of funds from our database with holdings in Chemours Co (NYSE:CC) fell by two quarter-over-quarter to 28 at the end of June.

On the next page, we examine Cirrus Logic, Las Vegas Sands Corp, and MGM Resorts International.

Given that many traders think of Apple iPhone when they hear the name Cirrus Logic, Inc. (NASDAQ:CRUS), it’s not surprising that the stock of this Apple supplier hit a 52-week high this week. The demand for Apple Inc. (NASDAQ:AAPL)’s new iPhone 7 and 7 Plus seem to be lights-out from all the reports, and the price action in Apple’s stock indicates that demand will remain strong for the coming quarters too. That’s good news for Cirrus because it means demand for Cirrus’ products will likely be strong as well. Shares of the stock have surged by 13.15% in the last five trading sessions, versus Apple’s 11.42% rise and the NASDAQ’s comparatively tame 2.31% gain. According to our data, 27 funds owned $155.17 million worth of Cirrus Logic, Inc. (NASDAQ:CRUS)’s stock, which accounted for 6.40% of the float on June 30, versus 33 funds and $211.78 million, respectively, on March 31.

Macau-related stocks Las Vegas Sands Corp. (NYSE:LVS) and MGM Resorts International (NYSE:MGM) continued to rally this week, rising by 4.8% and 2.7% to both hit 52-week highs on Friday. The main reason for the rally in both stocks is the increasing belief that gambling revenues in Macau have turned the corner. Total gaming revenues in the city recently rose for the first month in over two years, and the government there has shown signs of being more accommodative to casino-related businesses. Throw in momentum-buying/trend-following and the fact that Las Vegas Sands shares remain attractive from a dividend yield standpoint (the stock yields almost 5% at current prices), and it’s not surprising that both stocks have done very well in 2016.

Some hedge funds missed out on the big rally in Macau related stocks. Among the funds we track, 23 investors owned shares of Las Vegas Sands Corp. (NYSE:LVS) at the end of the second quarter, down by seven from the previous quarter. Meanwhile, the smart money was a big fan of MGM between April 1 and June 30, as 59 funds from our database owned shares of MGM Resorts International (NYSE:MGM) at the end of the second quarter, up by four from the previous quarter.

Disclosure: none