Although several major companies have recently reported earnings, shares of five other companies, Clayton Williams Energy, Inc. (NYSE:CWEI), Netflix, Inc. (NASDAQ:NFLX), Tesla Motors Inc (NASDAQ:TSLA), Valeant Pharmaceuticals Intl Inc (NYSE:VRX), and SAExploration Holdings, Inc. (NASDAQ:SAEX), are trending for various reasons.
In this article, let’s examine the reasons each stock is in the spotlight and see how the smart money investors from our database were positioned towards them.
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).
Clayton Williams Energy, Inc. (NYSE:CWEI) shares have surged by 8% in extended-market trading after the company agreed to sell almost all of its assets in the Giddings Area in East Central Texas, which produced an average of 3,900 BOE per day for the quarter ended in September 30, 2016, for $400 million. The management intends to use the proceeds of the deal, which is expected to close in December, to fund development in the Delaware Basin, and to repay some debt. Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners inched up its stake by 2% in the second quarter to 790,324 shares in Clayton Williams Energy, Inc. (NYSE:CWEI) at the end of June.
Netflix, Inc. (NASDAQ:NFLX) is in the spotlight after the internet streamer up-sized its bond offering to $1 billion from $800 million. The favorite among cord-cutters intends to use the money raised to fund the creation of more content, which should help widen Netflix’s moat against competitors and bring in more subscribers. According to a press release, the 10 year notes will yield only 4.375%, which is a record low for dollar debt offerings from domestic companies with Netflix’s notes’ rating and maturity. Of the 749 elite funds we track, 54 owned $3.73 billion worth of Netflix, Inc. (NASDAQ:NFLX)’s stock, which accounted for 9.50% of the float on June 30, versus 64 and $6.66 billion, respectively, on March 31.
On the next page, we examine Tesla Motors, Valeant Pharmaceuticals Intl, and SAExploration Holdings.