Although all three major indexes retracted on Tuesday, five stocks, Yum! Brands, Inc. (NYSE:YUM), Yelp Inc (NYSE:YELP), Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR), Occidental Petroleum Corporation (NYSE:OXY), and Continental Resources, Inc. (NYSE:CLR), each made 52-week highs. Let’s take a closer look at the latest developments surrounding these companies and see how the smart money investors from our database are positioned towards them.
Hedge fund sentiment is an important metric for assessing the long-term profitability. At Insider Monkey, we track around 750 hedge funds, whose quarterly 13F filings we analyze and determine their collective sentiment towards several thousand stocks. However, our research has shown that the best strategy is to follow hedge funds into their small-cap picks. This approach can allow monthly returns of nearly 95 basis points above the market, as we determined through extensive backtests covering the period between 1999 and 2012 (see the details here).
Investors Are Loving Yum! Again
After falling sharply due to poor guidance and slow Chinese same-store sales late last year, Yum! Brands, Inc. (NYSE:YUM) has officially recovered most of its losses. Shares of the restaurant chain hit a 52-week high of $91.15 on Tuesday and look poised to challenge the all-time high it hit in 2015. Powering Yum! Brands, Inc. (NYSE:YUM)’s resurgence has been strong Chinese same-store sales and anticipation that Yum! could obtain a healthy valuation for its Chinese division spin-off. Dan Loeb’s Third Point took some profits in the second quarter and cut its stake in Yum! Brands by 55% to 2.5 million shares held at the end of June.
Yelp Rises Again
Although Alphabet Inc (NASDAQ:GOOG)’s Google remains a threat to the ratings site, investors have been largely willing to overlook the potential competition and focus more on Yelp Inc (NYSE:YELP)‘s positives. Yelp Inc (NYSE:YELP)’s shares hit a 52 week high of $39.10 as investors focused on the company’s massive potential. With around 200 million unique visitors every month, Yelp is one of the few dominant review and search sites for hundreds of thousands of small businesses across the world. Many bulls believe Yelp’s current management is on the right track in terms of converting the company’s massive user-base into sustainable profits. Of the around 750 elite funds we track, 45 funds owned $953.73 million worth of Yelp Inc (NYSE:YELP)’s stock, which accounted for 41.10% of the float on June 30, versus 33 funds and $605.33 million, respectively, a quarter earlier.
On the next page, we take a closer look at Petroleo Brasileiro SA Petrobras (ADR), Occidental Petroleum Corporation, and Continental Resources Inc.