Investors are in a profit-taking mode today as all three major indexes are a bit lower, with the NASDAQ leading the way, with declines of 0.56%. Among the stocks trending this morning are several industrial companies, two energy companies and one famous restaurant chain.
Let’s examine the catalysts causing traders to talk about Ford Motor Company (NYSE:F), Phillips 66 Partners LP (NYSE:PSXP), Phillips 66 (NYSE:PSX), Yum! Brands, Inc. (NYSE:YUM), and General Electric Company (NYSE:GE) and analyze the hedge fund sentiment toward the stocks.
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).
Ford Motor Company (NYSE:F) is in the spotlight today after the company announced that it will shutter its Michigan Mustang factory, which makes all Mustangs sold world-wide, for a week due to soft demand. Domestic sales for Mustangs dropped by 32% in the last month, allowing the rival Chevrolet Camaro to outsell the iconic car for the first time in over a year. While its Mustang sales haven’t been doing so well, Ford’s China sales are doing just fine, as they spiked by 24% year-over-year in September, and are now up by 11% year-to-date. Richard S. Pzena‘s Pzena Investment Management raised its stake in Ford Motor Company (NYSE:F) by 1% to just over 18.45 million shares during the second quarter .
Two energy companies are trending after Phillips 66 Partners LP (NYSE:PSXP) agreed to buy 30 crude, refined products and natural gas liquids logistics assets from Phillips 66 (NYSE:PSX) for a total consideration of $1.3 billion. The deal is expected to be immediately accretive to Phillips 66 Partners unitholders and the company plans to fund the purchase with a combination of debt and $196 million in new units issued to Phillips 66. In connection with the purchase, Phillips 66 plans to enter into 10-year throughput and terminaling agreements that will include minimum volume commitments covering around 85% of forecasted volumes. Of the around 749 funds that we track, five funds were long Phillips 66 Partners LP (NYSE:PSXP) and 26 held shares of Phillips 66 (NYSE:PSX) on June 30.
On the next page, we examine Yum! Brands, and General Electric Company.