Hedge Fund Sentiment Suggests You Should Bet On Only One Of These 3 Upgraded Stocks

Moving on, analysts at CLSA and Credit Agricole upgraded Baidu.com, Inc. (ADR) (NASDAQ:BIDU) to ‘Buy’ from ‘Underperform’. Shares are down by 40% year-to-date because of a weak Chinese economy and a shaky Chinese stock market. Now that China’s stock market has stabilized, Baidu should perform better. Shares of Baidu trade at 19.2 times forward earnings and a PEG of 1.39. Unlike analysts, hedge funds are less optimistic. Our data shows that 70 hedge funds were long Baidu.com, Inc. (ADR) (NASDAQ:BIDU) at the end of June, down from 75 hedge funds long the stock at the end of March. Hedge funds had $4.98 billion in aggregate positions, a decline from $7.0 billion at the end of March. Among the funds that cut exposure to the stock was William Von Mueffling’s Cantillon Capital Management, which reduced its position by 3% to 2.2 million shares.

Lastly, analysts at Bernstein upgraded Raytheon Company (NYSE:RTN) to ‘Outperform’ from ‘Market Perform’. The analysts have a target price of $132 per share, or approximately 25% higher than the stock’s current price. Raytheon shares trade at a reasonable 14.7 times forward earnings and are down by 2% year-to-date. Like analysts, hedge funds are fond of Raytheon Company (NYSE:RTN). Our data shows that 37 hedge funds were long Raytheon at the end of June, up from 25 hedge funds long in the stock at the end of March. The total value of hedge funds’ positions increased to $905 million in aggregate (good for 3.1% of the float), up from $669 million in the quarter prior. Cliff Asness’ AQR Capital Management increased its position by 8% to 1.8 million shares, while Israel Englander’s Millennium Management raised its position by 2,014% to 1.4 million shares by the end of the second quarter.

Disclosure: None