Hedge Funds Are Buying J.C. Penney Company, Inc. (JCP) And More

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NQ Mobile Inc (ADR) (NYSE:NQ) has been another of SAC’s recent stock picks as a 13G has recorded a stake equivalent to 5.5% of the $840 million market cap mobile Internet services company headquartered in China. Over 1.5 million shares of the stock are traded per day, so there is plenty of volume. Revenue has been up strongly, and the stock price has risen with it (more than doubling over the last year in each case) though profits have been lagging. The sell-side sees margins improving over the next several years resulting in a forward P/E of 12 and a five-year PEG ratio well below 1.

Billionaire Ken Griffin’s Citadel Investment Group owns 3.1 million shares of ADTRAN, Inc. (NASDAQ:ADTN), a communications networking equipment company. Research more stocks Citadel owns. Adtran is another company which has been struggling recently; both sales and profits declined at a double-digit rate last quarter compared to the second quarter of 2012. With earnings being quite low and only expected to recover somewhat next year, the forward P/E is still quite high at 26. A number of market players have taken this valuation as a cue to short the stock, and we think that we would avoid Adtran at these levels on pricing.

Disclosure: I own no shares of any stocks mentioned in this article.

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