Here’s Why These Five Stocks Are in Spotlight Today

All three major indexes are slightly lower after the nonfarm payroll for September came in at 156,000 versus the expected 176,000. The U.S. unemployment rate also ticked up to 5%.

In this article, we will analyze why five stocks,  Yahoo! Inc. (NASDAQ:YHOO), Verizon Communications Inc. (NYSE:VZ), Honeywell International Inc. (NYSE:HON), ArcelorMittal SA (ADR) (NYSE:MT), and CIT Group Inc. (NYSE:CIT) are trending. We will also use data from the last round of 13F filings to see what the smart money investors from our database collectively think about each stock.

At Insider Monkey, we track around 740 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on, can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see the details here).

According to the New York Post, Verizon Communications Inc. (NYSE:VZ) is indeed asking Yahoo! Inc. (NASDAQ:YHOO) for a discount due to the internet giant’s giant data leak in 2014 and all the resulting fall-out. According to the Post’s sources, Verizon is seeking to knock $1 billion off the previous purchase price of $4.8 billion. Yahoo’s management, meanwhile, is pushing back, saying that “a deal is a deal and that telecom giant has no legal recourse to change the terms”. According to our data, the number of funds with holdings in Verizon Communications Inc. (NYSE:VZ) fell by nine quarter-over-quarter to 52 at the end of June while the number of funds with stakes in Yahoo! Inc. (NASDAQ:YHOO) retreated by 16 to 81 during the second quarter.

Honeywell International Inc. (NYSE:HON) shares are 7% in the red after it issued soft guidance for the third quarter, with the management expecting EPS of $1.67, excluding a stock compensation restructuring, and EPS of $1.60 including that restructurin. Analysts were expecting $1.70 per share. Revenue for the period will likely be around $9.8 billion, versus the previous estimate $10.0-$10.2 billion. In addition, Honeywell sees full-year earnings per share coming in between $6.60 and $6.64, down from the previous $6.60-$6.70 range. A total of 48 funds from our database were long Honeywell International Inc. (NYSE:HON) at the end of the second quarter, down by seven funds from the previous quarter.

On the next page, we examine ArcelorMittal SA and CIT Group.

ArcelorMittal SA (ADR) (NYSE:MT) shares are in the spotlight after Reuters reported that the EU has instituted provisional import duties on certain types of Chinese steel, which regulators find are priced at unfairly low prices (basically China’s dumping them). The duties, which are in the range of 13.2% to 22.6% for one type and 65.1% to 73.7% for another, will last for six months until the European Commission makes a more permanent decision, which could last five years. At the end of June, 25 funds tracked by us were long ArcelorMittal SA (ADR) (NYSE:MT).

Last but certainly not least, CIT Group Inc. (NYSE:CIT) shares have rallied by around 2.2% after the company announced a definitive agreement to sell CIT Commercial Air to Avolon Holdings for $10 billion. The transaction is expected to close by the end of the first quarter of 2017. The $10 billion purchase price represents a premium of around 6.7% to net assets and the company’s management intends to return up to $3.3 billion of common equity back to shareholders. CIT is selling its commercial aircraft leasing business to focus more on being a leading national middle-market bank. Among the funds in our database, 30 funds held $1.04 billion worth of CIT Group Inc. (NYSE:CIT)’s stock, which accounted for 16.10% of the float on June 30.

Disclosure: None