Here’s Why These Five Stocks Are in Spotlight Today

Market indices are in the green today following a better-than-expected jobs report, which helped the stocks to recover from Brexit-triggered losses.

Several stocks are on investors’ radar today, including Intel Corporation (NASDAQ:INTC), Advanced Micro Devices, Inc. (NASDAQ:AMD), Aetna Inc (NYSE:AET), Humana Inc (NYSE:HUM) and McDonald’s Corporation (NYSE:MCD). Let’s take a closer look at the companies in question and see how funds in our database are positioned towards these companies.

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 more details here).

Ratings Update for Intel and AMD

Intel Corporation (NASDAQ:INTC) and Advanced Micro Devices, Inc. (NASDAQ:AMD) are trending today following a ratings update from global asset management firm Sanford C. Bernstein. The firm upgraded Intel to “Market Perform” from “Underperform”. On the other hand, Intel’s rival AMD was downgraded to “Underperform” from “Market Perform”. Shares of Intel are up by more than 2% so far today, while AMD’s stock opened lower but has recovered and is over 1% in the green. A total of 54 funds from our database were long Intel Corporation (NASDAQ:INTC) at the end of the first quarter. Among them, Natixis Global Asset Management’s Harris Associates owns more than 43.69 million shares of the company. On the other hand, 13 funds were bullish on Advanced Micro Devices, Inc. (NASDAQ:AMD) at the end of the first quarter of 2016.

On the next page, we are going to discuss the developments that have put Aetna, Humana and McDonald’s in the spotlight.

Justice Department Concerned About Aetna-Humana Merger

Aetna Inc (NYSE:AET) and Humana Inc (NYSE:HUM) both inched further down after the bell, having extended the losses from the previous day, but managed to recover. The performance of both stocks was affected by a Reuters report on Thursday  that claimed that the U.S. Department of Justice has “significant concerns” over Aetna’s proposed acquisition of Humana amid fears that the deal would hurt the market competition. The proposed merger would combine two big players in the Medicare Advantage plans sector. A meeting between Assistant Attorney General William Baer and officials from the two companies is scheduled to take place on Friday on this matter.  Last week, Aetna started divesting approximately $1 billion worth of Medicare Advantage assets to address antitrust concerns. From our database, 63 funds held shares of Aetna Inc (NYSE:AET) at the end of the first quarter, whereas 64 investors owned stakes in Humana Inc (NYSE:HUM).

McDonald’s To Incur $235 Million

McDonald’s Corporation (NYSE:MCD) is on the move today after it announced on Thursday that it would incur $235 million in charges in the June quarter related to its planned sale of 4,000 restaurants to franchisees by 2018 and costs of relocation of its headquarters to downtown Chicago. The charge would slash the profit by $0.20, the company said. McDonald’s Corporation (NYSE:MCD) had revealed its plans for about $500 million in general and administrative savings to be achieved by the end of 2017. Shares of the fast food company are trading 0.54% in the green so far today. Among the funds we track, 83 funds were bullish on McDonald’s Corporation (NYSE:MCD) at the end of the first quarter. Among them, Jonathon Jacobson’s Highfields Capital Management owns around 4.75 million shares of the company.

Disclosure: None