After a poor start of the year, U.S. stocks are having a break today, trading in a close range. Energy stocks were the biggest losers from the S&P500, as lower oil prices have also put pressure on the market. In this article we’ll take a look at the latest upgrades and downgrades of the leading firms and see how First Solar, Inc. (NASDAQ:FSLR), J C Penney Company Inc (NYSE:JCP), Nordstrom, Inc.(NYSE:JWN), Tyson Foods, Inc. (NYSE:TSN), and Capital One Financial Corp. (NYSE:COF) are faring today.
At Insider Monkey, we track hedge funds’ moves in order to identify actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically underperformed the S&P 500 Total Return Index by an average of seven basis points per month between 1999 and 2012. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Index by an average of 95 basis points per month (read the details here). Since the official launch of our small-cap strategy in August 2012, it has performed just as predicted, returning over 102% and beating the market by more than 53 percentage points. We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise (while avoiding their high fees at the same time) rather than large-cap stocks.
Analysts at Goldman Sachs suggest First Solar, Inc. (NASDAQ:FSLR) is a good stock to buy, having established that the solar equipment company has the best balance sheet among its peers. In a recent note to investors, Goldman has upgraded the stock to ‘Buy’ from the previous ‘Neutral’ rating and have increased their price target to $100 from $61. The company boasts a debt-to-equity ratio of 0.06, below industry average, and quick ratio of 2.70, which implies that it can easily meet its short-term obligations.
First Solar, Inc. (NASDAQ:FSLR) gained a boost in popularity during the third quarter of 2015, with the number of hedge fund long positions (among the funds we track) increasing to 34, while their combined positions accounted for a little over 8% of the company’s common stock. Israel Englander is betting big on First Solar, having boosted his stake by more than 400% during the quarter. In its latest 13F filing, Millennium Management reported a position that amounted to 1.05 million shares, the largest among the funds we track.
Citigroup has issued an update on two U.S. retailers, having upgraded one of them and downgraded the other. J C Penney Company Inc (NYSE:JCP) was the one getting the nod, with analysts saying that the stock is currently trading at a fair price, having slumped by roughly 30% in the past three months. The firm has upgraded the stock to ‘Neutral’ from ‘Sell’ rating. Nordstrom, Inc. (NYSE:JWN), on the other hand, was downgraded to ‘Neutral’ from ‘Buy’, with analysts pointing to the fact that the slowdown in sales exceeded their expectations. Citigroup has also lowered its price target to $52 from $65. The stock is currently trading at $49.25, down by 1.6% from yesterday’s closing price.
Roughly 20% of J C Penney Company Inc (NYSE:JCP)’s outstanding stock was held by 35 funds from our database at the end of the third quarter, up from 31 a quarter earlier. Jim Simons‘ Renaissance Technologies has a notable position in J C Penney, having also reported a 33% increase by the end of September to approximately 14.7 million shares.
Shares of Nordstrom, Inc. (NYSE:JWN) were in great demand among hedge fund managers, as the number of long positions increased to 38 from 27 over the third quarter. While Ken Griffin was busy dumping 37% of his holding, Steven Cohen was buying left and right, increasing his investment by nearly 900%. In their latest quarterly filings, Citadel Investment Group and Point72 Asset Management reported ownership of 3.1 million shares and 857,100 shares of Nordstrom, respectively.